Tuesday, July 11, 2023

Wednesday Watch

Evening Headlines

Bloomberg:

Zero Hedge:
Wall Street Journal:  
TheGatewayPundit.com:
Twitter: 
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 114.75 -2.0 basis points. 
  • China Sovereign CDS 62.0 -1.75 basis points.
  • China Iron Ore Spot 107.0 USD/Metric Tonne +1.1%.
  • Bloomberg Emerging Markets Currency Index 43.5 +.06%.
  • Bloomberg Global Risk-On/Risk Off Index 66.5 +.6%. 
  • Bloomberg US Financial Conditions Index .33 unch.
  • Volatility Index(VIX) futures 16.6 -.04%.
  • Euro Stoxx 50 futures +.32%.
  • S&P 500 futures -.01%.
  • NASDAQ 100 futures +.06%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Higher into Final Hour on More Dovish Fed Hopes, Loosening US Financial Conditions, Short-Covering, Consumer Discretionary/Commodity Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 15.0 -.7%
  • DJIA Intraday % Swing .60%
  • Bloomberg Global Risk On/Risk Off Index 66.1 +.44%
  • Euro/Yen Carry Return Index 162.7 -.65%
  • Emerging Markets Currency Volatility(VXY) 8.5 -1.1%
  • CBOE S&P 500 Implied Correlation Index 20.5 -.24% 
  • ISE Sentiment Index 169.0 +48.0 points
  • Total Put/Call .64 -26.4%
  • NYSE Arms 1.0 +6.38%
Credit Investor Angst:
  • North American Investment Grade CDS Index 66.9 -2.32%
  • US Energy High-Yield OAS 357.4 -2.1%
  • Bloomberg TRACE # Distressed Bonds Traded 363.0 +8.0
  • European Financial Sector CDS Index 83.19 -3.5% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 277.98 -2.9%
  • Italian/German 10Y Yld Spread 177.0 basis points +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 116.9 -1.4%
  • Emerging Market CDS Index 214.70 -2.24%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.77 +.12%
  • 2-Year Swap Spread 20.75 basis points -1.0 basis point
  • TED Spread 18.5 basis points -2.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -13.75 +1.0 basis point
  • MBS  5/10 Treasury Spread 173.0 +3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 715.0 +1.0 basis point
  • Avg. Auto ABS OAS 77.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 43.46 +.20%
  • 3-Month T-Bill Yield 5.37% +2.0 basis points
  • China Iron Ore Spot 106.3 USD/Metric Tonne +.46%
  • Dutch TTF Nat Gas(European benchmark) 29.1 euros/megawatt-hour  -3.9%
  • Citi US Economic Surprise Index 70.6 +.1 point
  • Citi Eurozone Economic Surprise Index -135.7 -.3 point
  • Citi Emerging Markets Economic Surprise Index -1.5 +6.0 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) -20.6% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.50 +.02:  Growth Rate +3.5% unch., P/E 19.1 +.1 point
  • S&P 500 Current Year Estimated Profit Margin 12.21% -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 215.58 +.29: Growth Rate +41.7% +.2 percentage point, P/E 35.7 +.4
  • Bloomberg US Financial Conditions Index .33 +2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -4.22 +5.0 basis points
  • US Yield Curve -91.25 basis points (2s/10s) -4.25 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +2.29% +16.0 basis points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.35% unch.: CPI YoY +3.22% unch.
  • 10-Year TIPS Spread 2.24 -1.0 basis point
  • Highest target rate probability for Sept. 20th FOMC meeting: 70.3%(-2.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 54.9%(-2.1 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +62 open in Japan 
  • China A50 Futures: Indicating -128 open in China
  • DAX Futures: Indicating +122 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my tech/medical/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth +.2%
Sector Underperformers:
  • 1) Semis -1.0% 2) Pharma -1.0% 3) Airlines -.6%
Stocks Falling on Unusual Volume: 
  • HELE, VRSN, EH, CMPS and VRDN
Stocks With Unusual Put Option Activity:
  • 1) HPE 2) ATVI 3) DBX 4) CAG 5) SPXU
Stocks With Most Negative News Mentions:
  • 1) IOVA 2) JBLU 3) ATLX 4) IBRX 5) DOYU
Charts:

Bull Radar

 Style Outperformer:

  • Mid-Cap Value +.9%
Sector Outperformers:
  • Oil Service +2.6% 2) Video Gaming +2.6% 3) Retail +2.0%
Stocks Rising on Unusual Volume:
  • RDFN, TNDM, ROKU, ATVI, AFRM, COIN, TSE, ETSY, SNAP, BLFS, ZG, SSTK, U, SMG, Z, HOOD, VMW, CDNA, EVBG, RBLX, HPQ, RH, AVTA, BX, EA, TTWO, MMM, BYND, DT, LOVE, GNRC, CRM, KNTK, RIOT and OGN
Stocks With Unusual Call Option Activity:
  • 1) RNG 2) PENN 3) ASO 4) ATVI 5) DLO
Stocks With Most Positive News Mentions:
  • 1) WDFC 2) ELOX 3) GDTC 4) BTTX 5) TAOP

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (ANGO)/.02
After the Close: 
  • (MLKN)/.39
Economic Releases  

8:30 am EST

  • The CPI MoM for June is estimated to rise +.3% versus a +.1% gain in May.
  • The CPI Ex Food and Energy MoM for June is estimated to rise +.3% versus a +.4% gain in May.
  • Real Average Weekly Earnings YoY for June.

10:30 am EST

  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -$549,800 barrels versus a -1,508,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,302,800 barrels versus a -2,549,000 barrel decline the prior week. Distillate inventories are estimated to fall by -527,200 barrels versus a -1,045,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.4% versus a -1.1% decline prior.

2:00 pm EST

  • The Federal Reserve Beige Book release.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The Fed's Mester speaking, Fed's Kashkari speaking, Bank of Canada update, 10Y T-Note auction and the weekly MBA Mortgage Applications report could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

  • NYSE Volume Running -4.8% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 10.4 -5.2
  • 3 Sectors Declining, 8 Sectors Rising
  • 69.0% of Issues Advancing, 28.0% Declining
  • 120 New 52-Week Highs, 8 New Lows
  • 53.8%(+3.0%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 60.0 +5.0
  • Bloomberg Global Risk-On/Risk-Off Index 66.0 +.3%
  • Russell 1000: Growth/Value 17,243.6 -.5%
  • 1-Day Vix 10.9 +4.2%
  • Vix 14.8 -1.5% 
  • Total Put/Call .73 -16.1%
  • TRIN/Arms .85 -9.6%