Thursday, June 23, 2022

Friday Watch

Evening Headlines

Bloomberg:           
Wall Street Journal:
Fox News:
Zero Hedge:
Newsmax: 
TheGatewayPundit.com: 
 The Epoch Times:
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 136.25 +.25 basis point. 
  • China Sovereign CDS 81.75 unch.
  • Bloomberg Emerging Markets Currency Index 50.42 -.04%.  
  • Bloomberg Global Risk-On/Risk Off Index 4,574.0 +258.0 points.
  • Volatility Index(VIX) futures 29.0 -.03%.
  • Euro Stoxx 50 futures +.15%.
  • S&P 500 futures -.18%.
  • NASDAQ 100 futures -.11%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (KMX)/1.55
  • (CCL)/-1.14
After the Close:
  • None of note
Economic Releases
10:00 am EST
  • New Home Sales for May is estimated to fall to 590K versus 591K in April.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Bullard speaking, Fed's Daly speaking, German IFO Guidance and the (CCL) business update could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Lower Long-Term Rates, Short-Covering, Technical Buying, Biotech/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance:  Mixed
  • Volume:  Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 29.2 +1.0%
  • DJIA Intraday % Swing 1.39% -18.7%
  • Bloomberg Global Risk On/Risk Off Index 4,388.0 -207.0 points
  • Euro/Yen Carry Return Index 146.19 -1.4%
  • Emerging Markets Currency Volatility(VXY) 12.2 -.7%
  • CBOE S&P 500 Implied Correlation Index 49.6 +3.0% 
  • ISE Sentiment Index 79.0 -12.0 points
  • Total Put/Call .94 +7.8%
  • NYSE Arms 1.54 +20.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 99.19 -.36%
  • US Energy High-Yield OAS 479.02 +1.8%
  • Bloomberg TRACE # Distressed Bonds Traded 377.0 +25.0
  • European Financial Sector CDS Index 123.18 +2.9%
  • Italian/German 10Y Yld Spread 196.0 basis points +5.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 135.33 +2.2%
  • Emerging Market CDS Index 326.71 -.26%
  • China Corp. High-Yield Bond USD ETF(KHYB) 27.90 -.59%
  • Ukraine Sovereign Debt Credit Default Swap 9,376.26 +14.0%
  • 2-Year Swap Spread 37.0 basis points -3.25 basis points
  • TED Spread 60.0 basis points +8.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -25.0 basis points -.25 basis point
  • MBS  5/10 Treasury Spread  137.0 +4.0 basis points
  • iShares CMBS ETF 47.71 +.92%
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 50.42 -.50%
  • 3-Month T-Bill Yield 1.58% +1.0 basis point
  • Yield Curve 7.0 basis points (2s/10s) -2.25 basis points
  • China Iron Ore Spot 116.55 USD/Metric Tonne +1.7%
  • Citi US Economic Surprise Index -78.7 -10.5 points
  • Citi Eurozone Economic Surprise Index 20.9 +7.6 points
  • Citi Emerging Markets Economic Surprise Index 24.4 +.1 point
  • 10-Year TIPS Spread 2.51 -4.0 basis points
  • Highest target rate probability for September 21st FOMC meeting: 62.8%(+5.9 percentage points) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 48.5%(+.5 percentage point) chance of 3.25%-3.5%.
US Covid-19:
  • 226 new infections/100K people(last 7 days total). 13.0%(+1.0 percentage point) of 1/14 peak +13/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -79.7%(+.1 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +19 open in Japan 
  • China A50 Futures: Indicating +29 open in China
  • DAX Futures: Indicating -7 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my tech/medical sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 75% Net Long

Mid-Day Market Internals

NYSE Composite Index:

  • Volume Running -1.7% Below 100-Day Average 
  • 4 Sectors Declining, 7 Sectors Rising
  • 58.1% of Issues Advancing, 39.0% Declining
  • 3 New 52-Week Highs, 151 New Lows
  • 17.7% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 36.6% 
  • Bloomberg Global Risk-On/Risk-Off Index 4,338.0 -251.0 points
  • Russell 1000: Growth/Value 15,253.0 +1.14%
  • Vix 29.2 +.9%
  • Total Put/Call .88 -13.7%
  • TRIN/Arms 1.62 +30.5%

Wednesday, June 22, 2022

Thursday Watch

Night Trading 

  • Asian equity indices are unch. to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 133.25 +6.5 basis points. 
  • China Sovereign CDS 81.75 +2.5 basis points.
  • Bloomberg Emerging Markets Currency Index 50.65 -.07%.  
  • Bloomberg Global Risk-On/Risk Off Index 4,715.0 +116.0 points.
  • Volatility Index(VIX) futures 29.05 +.14%.
  • Euro Stoxx 50 futures -.32%.
  • S&P 500 futures +.02%.
  • NASDAQ 100 futures +.01%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (ACN)/2.85
  • (APOG)/.56
  • (DRI)/2.21
  • (FDS)/3.22
  • (RAD)/-.70
After the Close:
  • (BB)/-.06
  • (CAMP)/-.03
  • (FDX)/6.87
  • (SWBI)/.67
Economic Releases
8:30 am EST
  • The Current Account Balance for 1Q is estimated to widen to -$275.0B versus -$217.9B in 4Q.
  • Initial Jobless Claims for last week is estimated to fall to 226K versus 229K the prior week. 
  • Continuing Claims is estimated to rise to 1329K versus 1312K prior.
9:45 am EST
  • S&P Global US Manufacturing for June is estimated to fall to 56.0 versus 57.0 in May.
  • S&P Global US Services PMI for June is estimated to rise to 53.5 versus 53.4 in May.
  • S&P Global US Composite PMI for June is estimated to fall to 52.8 versus 53.6 in May.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,022,880 barrels versus a +1,956,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -383,130 barrels versus a -710,000 barrel decline the prior week. Distillate inventories are estimated to fall by -60,250 barrels versus a 725,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.44% versus a -.5% decline prior.
11:00 am EST
  • The Kansas City Fed Manufacturing Activity Index for June is estimated to fall to 15.0 versus 23.0 in May.
Upcoming Splits
  • (FTNT) 5-for-1
Other Potential Market Movers
  • The Fed's Powell testimony to House, Eurozone PMI report, bank stress test results and the weekly EIA natural gas inventory report could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Reversing Higher into Afternoon on Lower Long-Term Rates, Dollar Weakness, Short-Covering, Biotech/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Higher
  • Sector Performance:  Mixed
  • Volume:  Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 29.3 -3.1%
  • DJIA Intraday % Swing 1.70% +17.8%
  • Bloomberg Global Risk On/Risk Off Index 4,640.0 -305.0 points
  • Euro/Yen Carry Return Index 148.36 +.11%
  • Emerging Markets Currency Volatility(VXY) 12.3 +.08%
  • CBOE S&P 500 Implied Correlation Index 50.5 -.8% 
  • ISE Sentiment Index 93.0 -18.4 points
  • Total Put/Call .97 +10.2%
  • NYSE Arms 1.00 +61.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 98.92 +1.1%
  • US Energy High-Yield OAS 467.01 +4.9%
  • Bloomberg TRACE # Distressed Bonds Traded 352.0 -34.0
  • European Financial Sector CDS Index 120.08 +3.5%
  • Italian/German 10Y Yld Spread 191.0 basis points -2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 132.32 +2.6%
  • Emerging Market CDS Index 324.50 +1.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 28.07 -.16%
  • Ukraine Sovereign Debt Credit Default Swap 8,222.03 +8.6%
  • 2-Year Swap Spread 40.25 basis points -.25 basis point
  • TED Spread 51.5 basis points -8.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -24.75 basis points -2.25 basis points
  • MBS  5/10 Treasury Spread  133.0 -3.0 basis points
  • iShares CMBS ETF 47.71 +.88%
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 50.76 -.02%
  • 3-Month T-Bill Yield 1.57% +5.0 basis points
  • Yield Curve 9.25 basis points (2s/10s) -1.25 basis points
  • China Iron Ore Spot 112.3 USD/Metric Tonne -.9%
  • Citi US Economic Surprise Index -68.2 +.1 point
  • Citi Eurozone Economic Surprise Index 28.5 -.7 point
  • Citi Emerging Markets Economic Surprise Index 24.3 unch.
  • 10-Year TIPS Spread 2.55 -7.0 basis points
  • Highest target rate probability for September 21st FOMC meeting: 56.9% chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 48.0% chance of 3.25%-3.5%.
US Covid-19:
  • 213 new infections/100K people(last 7 days total). 12.0%(+1.0 percentage point) of 1/14 peak +19/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -79.8%(+.3 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +261 open in Japan 
  • China A50 Futures: Indicating +64 open in China
  • DAX Futures: Indicating +7 open in Germany
Portfolio:
  • Higher:  On gains in my tech/industrial/medical sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 75% Net Long