Thursday, April 10, 2025

Stocks Sharply Lower into Final Hour on Higher Long-Term Rates, Overdone Rally Giveback, Technical Selling, Energy/Tech Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Almost Every Sector Falling
  • Volume: Heavy
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 42.5 +26.5%
  • S&P 500 Intraday % Swing 3.8 +82.8%
  • Bloomberg Global Risk On/Risk Off Index 48.0 -8.6%
  • Euro/Yen Carry Return Index 182.1 +1.4%
  • Emerging Markets Currency Volatility(VXY) 9.7 -3.8%
  • CBOE S&P 500 Implied Correlation Index 46.0 +17.1% 
  • ISE Sentiment Index 108.0 -21.0 points
  • Total Put/Call 1.10 +4.8%
  • NYSE Arms .89 +423.5%
  • NYSE Non-Block Money Flow -$285.1M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 71.8 +5.7%
  • US Energy High-Yield OAS 533.1 +4.6%
  • Bloomberg TRACE # Distressed Bonds Traded 330.0 -18.0
  • European Financial Sector CDS Index 81.9 -10.6%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 188.5 -10.8%
  • Italian/German 10Y Yld Spread 121.0 basis points -8.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 113.0 -11.0%
  • Emerging Market CDS Index 212.3 +5.3%
  • Israel Sovereign CDS 118.8 -1.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.0 -1.6%
  • 2-Year SOFR Swap Spread -25.0 basis points -3.0 basis points
  • 3M T-Bill Treasury Repo Spread -8.75 basis points -5.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +.75 basis point
  • MBS  5/10 Treasury Spread 158.0 +3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 639.0 -1.0 basis points
  • Avg. Auto ABS OAS 66.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.7 +.3%
  • 3-Month T-Bill Yield 4.31% -2.0 basis points
  • China Iron Ore Spot 97.5 USD/Metric Tonne +.3%
  • Dutch TTF Nat Gas(European benchmark) 33.3 euros/megawatt-hour -1.1%
  • Citi US Economic Surprise Index -15.4 -7.8 points
  • Citi Eurozone Economic Surprise Index 10.7 -1.0 point
  • Citi Emerging Markets Economic Surprise Index 2.9 +1.6 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(22 of 500 reporting) +4.6% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.59 -.11:  Growth Rate +13.0% -.1 percentage point, P/E 18.7 +.8
  • S&P 500 Current Year Estimated Profit Margin 13.51% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 418.24 -.19: Growth Rate +20.9% -.1 percentage point, P/E 26.5 +1.5
  • Bloomberg US Financial Conditions Index -.79 +79.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .22 -42.0 basis points
  • US Yield Curve 54.0 basis points (2s/10s) +8.5 basis points
  • US Atlanta Fed GDPNow Q1 Forecast -2.4% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 38.0% -2.4 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% -14.0 basis points: CPI YoY +2.42% -7.0 basis points
  • 10-Year TIPS Spread 2.21 -8.0 basis points
  • Highest target rate probability for June 18th FOMC meeting: 63.4% (+3.7 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 55.1%(+11.0 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -1,059 open in Japan 
  • China A50 Futures: Indicating -91 open in China
  • DAX Futures: Indicating +282 open in Germany
Portfolio:
  • Slightly Lower: On losses in my tech/industrial/consumer discretionary sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
  • Market Exposure: Moved to 25% net long

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