Monday, June 24, 2024

Tuesday Watch

Night Trading 

  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 100.0 +.5 basis point.
  • China Sovereign CDS 68.0 +.75 basis point.
  • China Iron Ore Spot 103.3 USD/Metric Tonne +.7%.
  • Bloomberg Emerging Markets Currency Index 39.1 unch.
  • Bloomberg Global Risk-On/Risk Off Index 56.6 -.9%.
  • Volatility Index(VIX) futures 14.5 +.4%.
  • Euro Stoxx 50 futures -.56%.
  • S&P 500 futures -.01%.
  • NASDAQ 100 futures +.04%.  
Morning Preview Links

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

Stocks Slightly Higher into Final Hour on Stable Long-Term Rates, Sector Rotation, Short-Covering, Commodity/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 13.4 +1.4%
  • DJIA Intraday % Swing .99 +97.7%
  • Bloomberg Global Risk On/Risk Off Index 57.2 +.5%
  • Euro/Yen Carry Return Index 187.7 +.3%
  • Emerging Markets Currency Volatility(VXY) 7.6 -.7%
  • CBOE S&P 500 Implied Correlation Index 11.3 +10.7% 
  • ISE Sentiment Index 147.0 +19.0
  • Total Put/Call .95 +11.8%
  • NYSE Arms .99 -7.5%
  • NYSE Non-Block Money Flow +$127.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.9 -.6%
  • US Energy High-Yield OAS 275.3 -.29%
  • Bloomberg TRACE # Distressed Bonds Traded 258 +6
  • European Financial Sector CDS Index 70.2 -4.3%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 183.3 -2.6%
  • Italian/German 10Y Yld Spread 151.0 basis points -2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 100.1 +.5%
  • Emerging Market CDS Index 171.9 -.07%
  • Israel Sovereign CDS 132.2 +2.0%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.16%
  • 2-Year SOFR Swap Spread -18.25 basis points -.5 basis point
  • Treasury Repo 3M T-Bill Spread 5.0 basis points -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -.5 basis point
  • MBS  5/10 Treasury Spread 144.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 717.0 -1.0 basis point
  • Avg. Auto ABS OAS 61.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.1 +.2%
  • 3-Month T-Bill Yield 5.35% -1.0 basis point
  • China Iron Ore Spot 103.2 USD/Metric Tonne +.6%
  • Dutch TTF Nat Gas(European benchmark) 34.1 euros/megawatt-hour +.4%
  • Citi US Economic Surprise Index -26.7 -1.1 point
  • Citi Eurozone Economic Surprise Index -14.2 -4.4 points
  • Citi Emerging Markets Economic Surprise Index 10.3 +.4 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(9 of 500 reporting) +2.0% -1.8 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.12 +.60:  Growth Rate +14.0% +.2 percentage point, P/E 21.1 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.83% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 336.15 +1.53: Growth Rate +25.3% +.6 percentage point, P/E 33.0 -.9
  • Bloomberg US Financial Conditions Index .97 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index .54 -2.0 basis points
  • US Yield Curve -49.0 basis points (2s/10s) -1.0 basis point
  • US Atlanta Fed 2Q GDPNow Forecast +3.0% -10.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.9% -2.0 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.13% unch.
  • 10-Year TIPS Spread 2.23 unch.
  • Highest target rate probability for Sept. 18th FOMC meeting: 61.1%(+1.6 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 50.3%(-.2 percentage point) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +40 open in Japan 
  • China A50 Futures: Indicating +24 open in China
  • DAX Futures: Indicating +101 open in Germany
Portfolio:
  • Modestly Higher:  On gains in my industrial/consumer discretionary/biotech/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth -.6%
Sector Underperformers:
  • 1) Semis -2.4% 2) Gambling -1.3% 3) Networking -1.3%
Stocks Falling on Unusual Volume: 
  • TTMI, MAX, SILA, AMSC, SON, NU, SPR, TNDM, AHCO, PAY, RMD, BBIO and INSP
Stocks With Unusual Put Option Activity:
  • 1) PTEN 2) NYCB 3) PSEC 4) NKLA 5) ANVS
Stocks With Most Negative News Mentions:
  • 1) RMD 2) BBIO 3) NVDA 4) EXAI 5) FSLY
Sector ETFs With Most Negative Money Flow:
  • 1) XLK 2) SMH 3) XLC 4) RSPT 5) QTEC

Bull Radar

Style Outperformer:

  • Small-Cap Value +1.1%
Sector Outperformers:
  • 1) Oil Service +3.1% 2) Regional Banks +2.2% 3) Biotech +2.1%
Stocks Rising on Unusual Volume:
  • ALNY, NNE, DJT, RXO, ARGX, AFRM, ARWR, RCKT, PUK, EDU, TDOC, MIRM, NBR, TALO, CHWY, CNK, SVCO, URGN, GLNG, CHX, CECO, RH, IONS, TROX, SLB, SBS, WFRD, NFE, ERO, IMO, ESTA, OXY, BPOP, SCS, RGP, BBVA, RGP, MTH, HBAN, PPBI, PAL, SNY, BVN and TNP
Stocks With Unusual Call Option Activity:
  • 1) ACHR 2) BBIO 3) LQDA 4) ALT 5) ALNY
Stocks With Most Positive News Mentions:
  • 1) ALNY 2) RXO 3) AFRM 4) EDU 5) ACET
Sector ETFs With Most Positive Money Flow:
  • 1) XLF 2) HACK 3) VGT 4) XLB 5) XLI
Charts:

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (SNX)/2.82
  • (CCL)/-.02
After the Close: 
  • (FDX)/5.34
  • (PRGS)/.95
  • (WOR)/.88
  • (JEF)/.63
Economic Releases

8:30 am EST

  • The Philly Fed Non-Manufacturing Activity Index for June.
  • The Chicago Fed National Activity Index for May is estimated to fall to -.25 versus -.23 in April.

9:00 am EST

  • The FHFA Houses Price Index MoM for April is estimated to rise +.3% versus a +.1% gain in March.
  • The S&P CoreLogic CS 20-City MoM SA for April is estimated to rise +.3% versus a +.33% gain in March.

10:00 am EST

  • The Conference Board Consumer Confidence Index for June is estimated to fall to 100.0 versus 102.0 in May.
  • The Richmond Fed Manufacturing Index for June is estimated to fall to -3 versus 0 in May.

Upcoming Splits

  • (CMG) 50-for-1
Other Potential Market Movers
  • The Fed's Cook speaking, Fed's Bowman speaking, 2Y T-Note auction, weekly US retail sales reports, (KMX) annual meeting and the (EXPE) annual meeting could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

  • Volume Running -12.2% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 12.4 -2.3
  • 2 Sectors Declining, 9 Sectors Rising
  • 72.2% of Issues Advancing, 25.0% Declining 
  • TRIN/Arms 1.03 -3.7%
  • Non-Block Money Flow +$194.1M
  • 72 New 52-Week Highs, 15 New Lows
  • 53.3% (+4.0%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 57.0 +2.0
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 57.2 +.5%
  • Bloomberg Cyclicals/Defensives Index 237.9 -.3%
  • Russell 1000: Growth/Value 20,569.4 -1.2%
  • CNN Fear & Greed Index 42.0 (FEAR) +2.0
  • 1-Day Vix 7.9 -11.7%
  • Vix 13.2 +.2%
  • Total Put/Call .92 +8.2%