Thursday, July 10, 2025

Stocks Higher into Final Hour on Stable Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Transport/Alt Energy Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 15.8 -.8%
  • S&P 500 Intraday % Swing .45 -26.0%
  • Bloomberg Global Risk On/Risk Off Index 77.8 +2.1% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 9.0 -.42%
  • Euro/Yen Carry Return Index 192.7 -.3%
  • Emerging Markets Currency Volatility(VXY) 7.9 +1.3%
  • CBOE S&P 500 Implied Correlation Index 17.1 -2.6% 
  • ISE Sentiment Index 186.0 +1.0
  • Total Put/Call .74 -14.9%
  • NYSE Arms 1.12 -39.5%
  • NYSE Non-Block Money Flow -$13.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 49.9 -.5%
  • US Energy High-Yield OAS 375.1 +.04%
  • Bloomberg TRACE # Distressed Bonds Traded 184.0 +3.0
  • European Financial Sector CDS Index 57.5 -.5%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 125.8 -1.0%
  • Italian/German 10Y Yld Spread 86.0 +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 72.6 -.8%
  • Emerging Market CDS Index 152.7 -1.1%
  • Israel Sovereign CDS 80.1 -1.5%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.95 -.15%
  • 2-Year SOFR Swap Spread -25.5 basis points -.5 basis point
  • 3M T-Bill Treasury Repo Spread 4.0 basis point +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap .75 unch.
  • MBS  5/10 Treasury Spread 144.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 599.0 unch.
  • Avg. Auto ABS OAS 55.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.1 +.21%
  • US 10-Year T-Note Yield 4.35% +1.0 basis point
  • 3-Month T-Bill Yield 4.35% unch.
  • China Iron Ore Spot 99.2 USD/Metric Tonne +.2%
  • Dutch TTF Nat Gas(European benchmark) 35.2 euros/megawatt-hour +2.5%
  • Citi US Economic Surprise Index 3.5 +2.4 points
  • Citi Eurozone Economic Surprise Index 31.5 -.7
  • Citi Emerging Markets Economic Surprise Index 23.5 -.7 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(20 of 500 reporting) +.6% -.9 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 281.38 -.03:  Growth Rate +10.7% unch., P/E 22.3 +.1
  • S&P 500 Current Year Estimated Profit Margin 13.43% -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 447.93 +.19: Growth Rate +20.0% +.1 percentage point, P/E 33.3 -.2
  • Bloomberg US Financial Conditions Index .58 +1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.63 -7.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 7.9 +.9
  • US Yield Curve 47.5 basis points (2s/10s) -.25 basis point
  • US Atlanta Fed GDPNow Q2 Forecast +2.6% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 44.0% +2.5 percentage pionts
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.64% unch.
  • 1-Year TIPS Spread 2.72 -3.0 basis points
  • 10-Year TIPS Spread 2.35 +1.0 basis point
  • Highest target rate probability for Sept. 17th FOMC meeting: 65.6% (-.2 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 43.4%(-.2 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Polymarket:
  • Which Countries Will the US Agree to Tariff Agreements with Before August? 
  • EU 77.0% unch.
  • India 64.0% -13.0 percentage points.
  • Japan 43.0% -1.0 percentage point. 
  • South Korea  44.0% -5.0 percentage points.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +144 open in Japan 
  • China A50 Futures: Indicating -59 open in China
  • DAX Futures: Indicating +102 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/utility/industrial/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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