Monday, April 28, 2025

Stocks Reversing Slightly Higher into Final Hour on US Global Trade Deal Hopes, Lower Long-Term Rates, Short-Covering, Telecom/Biotech Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Slightly Lower
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 25.7 +3.6%
  • S&P 500 Intraday % Swing 1.44 +8.5%
  • Bloomberg Global Risk On/Risk Off Index 58.1 -2.5% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.87 +.74%
  • Euro/Yen Carry Return Index 182.1 -.6%
  • Emerging Markets Currency Volatility(VXY) 8.6 -2.2%
  • CBOE S&P 500 Implied Correlation Index 35.0 +1.0% 
  • ISE Sentiment Index 126.0 -20.0
  • Total Put/Call .87 +7.4%
  • NYSE Arms .82 -42.7%
  • NYSE Non-Block Money Flow -$103.4M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 67.6 +1.8%
  • US Energy High-Yield OAS 453.4 +2.1%
  • Bloomberg TRACE # Distressed Bonds Traded 257.0 unch.
  • European Financial Sector CDS Index 70.5 -.7%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 165.1 -1.8%
  • Italian/German 10Y Yld Spread 111.0 basis points +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 94.1 -1.9%
  • Emerging Market CDS Index 195.6 +1.2%
  • Israel Sovereign CDS 101.0 -1.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.9 +.15%
  • 2-Year SOFR Swap Spread -23.25 basis points +1.25 basis points
  • 3M T-Bill Treasury Repo Spread -3.0 basis point -4.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -.5 basis point
  • MBS  5/10 Treasury Spread 157.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 640.0 -3.0 basis points
  • Avg. Auto ABS OAS 80.0 +5.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.0 +.13% 
  • US 10-Year T-Note Yield 4.21% -2.0 basis points
  • 3-Month T-Bill Yield 4.29% unch.
  • China Iron Ore Spot 98.5 USD/Metric Tonne +.04%
  • Dutch TTF Nat Gas(European benchmark) 32.4 euros/megawatt-hour -.1%
  • Citi US Economic Surprise Index .8 -.1 point
  • Citi Eurozone Economic Surprise Index -12.2 -4.4 points
  • Citi Emerging Markets Economic Surprise Index 13.3 +1.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(181 of 500 reporting) +17.5% -.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.76 +.33:  Growth Rate +12.2% +.1 percentage point, P/E 19.9 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.41% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +43.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 420.95 +3.00: Growth Rate +21.7% +.8 percentage point, P/E 28.9 -.3
  • Bloomberg US Financial Conditions Index -.21 +5.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .97 +4.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 10.6 +.3
  • US Yield Curve 52.5 basis points (2s/10s) +2.5 basis points
  • US Atlanta Fed GDPNow Q1 Forecast -2.5% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 43.3% +1.0 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% unch.: CPI YoY +2.35% unch.
  • 1-Year TIPS Spread 3.26 +3.0 basis points
  • 10-Year TIPS Spread 2.26 -1.0 basis point
  • Highest target rate probability for June 18th FOMC meeting: 57.2% (unch.) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 49.3%(+3.0 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +120 open in Japan 
  • China A50 Futures: Indicating -10 open in China
  • DAX Futures: Indicating +201 open in Germany
Portfolio:
  • Slightly Higher: On gains in my utility/tech/industrial sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and then covered some
  • Market Exposure: 75% Net Long

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