Tuesday, May 13, 2025

Stocks Surging into Final Hour on US-Global Trade Deals, Rising US Economic Acceleration Odds, Earnings Outlook Optimism, Tech/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 18.0 -2.0%
  • S&P 500 Intraday % Swing .94 +26.9%
  • Bloomberg Global Risk On/Risk Off Index 70.4 -1.1% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.55 +.5%
  • Euro/Yen Carry Return Index 185.4 +.27%
  • Emerging Markets Currency Volatility(VXY) 8.2 -4.8%
  • CBOE S&P 500 Implied Correlation Index 20.6 -13.0% 
  • ISE Sentiment Index 159.0 +27.0
  • Total Put/Call .72 -15.3%
  • NYSE Arms 1.0 +31.6%
  • NYSE Non-Block Money Flow +$162.8M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 54.1 -2.3%
  • US Energy High-Yield OAS 400.7 -2.3%
  • Bloomberg TRACE # Distressed Bonds Traded 248.0 -8.0
  • European Financial Sector CDS Index 60.0 -3.7%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 144.9 -3.2%
  • Italian/German 10Y Yld Spread 102.0 basis points -3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 80.7 -.1%
  • Emerging Market CDS Index 168.0 -2.7%
  • Israel Sovereign CDS 101.6 -1.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.94 +.16%
  • 2-Year SOFR Swap Spread -21.25 basis points +.25 basis point
  • 3M T-Bill Treasury Repo Spread 10.25 basis point -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.5 unch.
  • MBS  5/10 Treasury Spread 150.0 +2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 634.0 -2.0 basis points
  • Avg. Auto ABS OAS 70.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.95 +.3% 
  • US 10-Year T-Note Yield 4.50% +3.0 basis points
  • 3-Month T-Bill Yield 4.37% -2.0 basis points
  • China Iron Ore Spot 100.5 USD/Metric Tonne +1.0%
  • Dutch TTF Nat Gas(European benchmark) 35.74 euros/megawatt-hour +1.0%
  • Citi US Economic Surprise Index -8.3 -3.0 points
  • Citi Eurozone Economic Surprise Index 15.8 +5.3 points
  • Citi Emerging Markets Economic Surprise Index 26.9 +.1 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(455 of 500 reporting) +12.2% -.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 276.50 +.16:  Growth Rate +12.1% unch., P/E 21.3 +.3
  • S&P 500 Current Year Estimated Profit Margin 13.34% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +29.1% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 425.13 +.35: Growth Rate +22.9% +.1 percentage point, P/E 31.9 +1.1
  • Bloomberg US Financial Conditions Index .35 +27.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.30 +11.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 8.6 -.3 point
  • US Yield Curve 48.25 basis points (2s/10s) +2.75 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.3% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.6% +1.4 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% -1.0 basis point: CPI YoY +2.40% +6.0 basis points
  • 1-Year TIPS Spread 2.80 -6.0 basis points
  • 10-Year TIPS Spread 2.34 +3.0 basis points
  • Highest target rate probability for July 30th FOMC meeting: 63.3% (+1.9 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Sept. 17th meeting: 51.2%(-1.7 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +300 open in Japan 
  • China A50 Futures: Indicating +22 open in China
  • DAX Futures: Indicating +65 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/utility/technology/industrial/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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