Thursday, April 24, 2025

Stocks Surging into Afternoon on US/Global Trade Deal Hopes, Lower Long-Term Rates, Earnings Outlook Optimism, Tech/Alt Energy Sector Strength

  Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 22.7 -2.5%
  • S&P 500 Intraday % Swing 1.6 -25.2%
  • Bloomberg Global Risk On/Risk Off Index 57.6 +1.2% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.80 +.39%
  • Euro/Yen Carry Return Index 182.2 +.02%
  • Emerging Markets Currency Volatility(VXY) 8.99 -.99%
  • CBOE S&P 500 Implied Correlation Index 38.4 -2.4% 
  • ISE Sentiment Index 128.0 +32.0
  • Total Put/Call .94 +3.3%
  • NYSE Arms 1.41 +.71%
  • NYSE Non-Block Money Flow +$226.6M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 66.9 -2.1%
  • US Energy High-Yield OAS 445.0 -.7%
  • Bloomberg TRACE # Distressed Bonds Traded 257.0 -20.0
  • European Financial Sector CDS Index 71.9 -2.2%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 171.6 -1.4%
  • Italian/German 10Y Yld Spread 110.0 basis points -3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 100.2 +.8%
  • Emerging Market CDS Index 195.7 -2.5%
  • Israel Sovereign CDS 104.4 -1.7%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.79 +.5%
  • 2-Year SOFR Swap Spread -24.5 basis points -.5 basis point
  • 3M T-Bill Treasury Repo Spread 3.0 basis point +1.0 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.5 -.25 basis point
  • MBS  5/10 Treasury Spread 157.0 -3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 644.0 unch.
  • Avg. Auto ABS OAS 74.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.9 +.17% 
  • US 10-Year T-Note Yield 4.31% -7.0 basis point
  • 3-Month T-Bill Yield 4.30% -1.0 basis point
  • China Iron Ore Spot 98.9 USD/Metric Tonne -.6%
  • Dutch TTF Nat Gas(European benchmark) 33.6 euros/megawatt-hour -1.7%
  • Citi US Economic Surprise Index -.4 +14.7 points
  • Citi Eurozone Economic Surprise Index -7.4 +5.9 points
  • Citi Emerging Markets Economic Surprise Index 12.1 -.6 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(156 of 500 reporting) +13.1% +7.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.26 -.50:  Growth Rate +12.0% -.2 percentage point, P/E 19.5 -.1
  • S&P 500 Current Year Estimated Profit Margin 13.42% -3.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) +22.8% -.9 percentage point
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 417.81 -.32: Growth Rate +20.8% -.1 percentage point, P/E 28.7 +1.0
  • Bloomberg US Financial Conditions Index -.36 +17.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .92 +27.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 10.9 -1.1
  • US Yield Curve 50.75 basis points (2s/10s) -2.0 basis points
  • US Atlanta Fed GDPNow Q1 Forecast -2.5% -30.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.6% -1.2 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% unch.: CPI YoY +2.35% unch.
  • 1-Year TIPS Spread 3.22 +4.0 basis points
  • 10-Year TIPS Spread 2.31 +1.0 basis point
  • Highest target rate probability for June 18th FOMC meeting: 57.6% (+2.1 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 45.3%(+5.4 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +550 open in Japan 
  • China A50 Futures: Indicating +69 open in China
  • DAX Futures: Indicating +214 open in Germany
Portfolio:
  • Higher: On gains in my utility/consumer discretionary/industrial/tech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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