Tuesday, February 18, 2025

Wednesday Watch

Around X:

  • @elonmusk   
  • @libsoftiktok
  • @pepesgrandma
  • @BehizyTweets
  • @MelgibsonQ
  • @WallStreetApes
  • LISTEN UP American Taxpayers. Former Federal Worker gives an inside look at Federal Workers. “When I was hired, my boss bragged that it was basically impossible to get fired from the federal government.And that in her entire time working for the government, she'd only seen one person fired”. “When I worked for the government, we were allowed to work 50% in the office and 50% from home, for the most part. In some cases, if you'd worked there, like, I think over 10 years or something, you could actually work from home three days a week and work from the office two days a week”.
  • @BGatesIsaPsycho
  • @VigilantFox
  • @ValerieAnne1970
  • @DC_Draino
  • @KanekoaTheGreat
  • @TonySeruga
  • @themarketswork
  • 395 million social security numbers in the database versus 335 million citizens. More than 20 million over age of 100. More than 15 million over age of 110. Fraud, potentially at massive levels. But also huge implications for our elections. Easily fixed. But it wasn’t.
  • @ElinLovisaaaa
  • Forty years after the Swedish parliament unanimously decided to change the formerly homogenous Sweden into a multicultural country, violent crime has increased by 300% and rapes by 1,472%. Sweden is now the rape capital of the West.
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 66.25 -.75 basis point.
  • China Sovereign CDS 42.5 -1.5 basis points.
  • China Iron Ore Spot 106.9 USD/Metric Tonne +.13%
  • Bloomberg Emerging Markets Currency Index 37.3 -.04%.
  • Bloomberg Global Risk-On/Risk Off Index 77.7 +.01%.
  • Volatility Index(VIX) futures 17.1 -.44%.
  • Euro Stoxx 50 futures -.13%.
  • S&P 500 futures +.11%.
  • NASDAQ 100 futures +.17%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Slightly Lower into Final Hour on Higher Long-Term Rates, Rotation From FANG, Technical Selling, Consumer Discretionary/Healthcare Provider Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 15.8 +2.9%
  • S&P 500 Intraday % Swing .27 -14.2%.
  • Bloomberg Global Risk On/Risk Off Index 77.2 +.8%
  • Euro/Yen Carry Return Index 177.5 -.08%
  • Emerging Markets Currency Volatility(VXY) 8.83 -1.5%
  • CBOE S&P 500 Implied Correlation Index 12.5 +3.1% 
  • ISE Sentiment Index 180.0 -12.0 points
  • Total Put/Call .74 -43.5%
  • NYSE Arms .75 -50.0%
  • NYSE Non-Block Money Flow -$194.8M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 46.8 +.2%
  • US Energy High-Yield OAS 287.4 -1.1%
  • Bloomberg TRACE # Distressed Bonds Traded 174.0 -10
  • European Financial Sector CDS Index 55.60 -.9%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 134.4 -1.6%
  • Italian/German 10Y Yld Spread 105.0 basis points -5.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 65.9 -4.4%
  • Emerging Market CDS Index 150.6 +.02%
  • Israel Sovereign CDS 88.1 +.2%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.1 -.1%
  • 2-Year SOFR Swap Spread -15.0 basis points +.25 basis point
  • 3M T-Bill Treasury Repo Spread .5 basis point +1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -.75 unch.
  • MBS  5/10 Treasury Spread 131.0 -3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 599.0 -4.0 basis points
  • Avg. Auto ABS OAS 47.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.3 +.08%
  • 3-Month T-Bill Yield 4.31% unch.
  • China Iron Ore Spot 107.3 USD/Metric Tonne +.5%
  • Dutch TTF Nat Gas(European benchmark) 49.2 euros/megawatt-hour +2.2%
  • Citi US Economic Surprise Index .4 +.9 point
  • Citi Eurozone Economic Surprise Index 26.0 +11.0 points
  • Citi Emerging Markets Economic Surprise Index 3.5 -2.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(391 of 500 reporting) +10.6% +.2 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.14 +.15:  Growth Rate +16.1% +.1 percentage point, P/E 22.2 unch.
  • S&P 500 Current Year Estimated Profit Margin 11.84% +3.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +26.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 405.22 +.69: Growth Rate +31.0% +.2 percentage point, P/E 34.3 -.3
  • Bloomberg US Financial Conditions Index .81 -2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 2.13 +53.0 basis points
  • US Yield Curve 24.25 basis points (2s/10s) +2.75 basis points
  • US Atlanta Fed GDPNow Q1 Forecast +2.34% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.0% -.7 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.81% unch.
  • 10-Year TIPS Spread 2.46 +2.0 basis points
  • Highest target rate probability for May 7th FOMC meeting: 84.1% (+3.1 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 54.2%(+4.6 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating unch. open in Japan 
  • China A50 Futures: Indicating +3 open in China
  • DAX Futures: Indicating +80 open in Germany
Portfolio:
  • Higher: On gains in my tech/financial/utility/industrial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth -.5%
Sector Underperformers:
  • 1) Homebuiding -2.0% 2) Healthcare Providers -1.3% 3) Internet -1.2%
Stocks Falling on Unusual Volume: 
  • OPFI, JD, CAG, BILI, HRI, TNET, KRNT, MDT, BIDU, SG, HOOD, KC, TDOC, TEM, SERV, GRAL, RCUS and NEO
Stocks With Unusual Put Option Activity:
  • 1) DBX 2) FLR 3) ZETA 4) ETSY 5) NVAX
Stocks With Most Negative News Mentions:
  • 1) BIDU 2) CAG 3) UNH 4) APLT 5) BIOA
Sector ETFs With Most Negative Money Flow:
  • 1) XLF 2) VCR 3) MAGS 4) VDE 5) VIS

Bull Radar

Style Outperformer:

  • Mid-Cap Value +.5%
Sector Outperformers:
  • 1) Computer Hardware +2.6% 2) Energy +2.0% 3) Semis +1.5%
Stocks Rising on Unusual Volume:
  • WGS, WRD, OSCR, BKSY, PCT, HEES, AGRO, SMCI, PGY, WBA, INTC, STAA, WSO, IRBT, PONY, BLMN, ZLAB, INOD, SPIR, BBWI, VNET, FN, SIBN, CMPO, FWRG, GT, NTLA, LMND, ZETA, MU, LSCC, HUN, MRUS, OTTR, SHAK, NBIS, HII, CRS, EC, MIRM, EAT, LYFT, VC, LNTH, PDD, XPEV, ARVN, JLIT, NWG, ALAB, DELL, FROG, NKE, GLPG, AMBA, CC, LNW, LNTH, YY, STZ, DOCN, MTW, PTLO, EEFT, MUFG, SA, NXPI, GDS, SA, CAKE, SOFI, WEN, SIMO, DE, FOUR, ACHR, DB, PBR, EH, FIVN, BROS, HSBC, SDGR, ATAT, EXPD, WDC, CLF, ANET and SNCY
Stocks With Unusual Call Option Activity:
  • 1) CCI 2) OSCR 3) FEZ 4) PACB 5) SABR
Stocks With Most Positive News Mentions:
  • 1) WGS 2) SMCI 3) WBA 4) INTC 5) VMI
Sector ETFs With Most Positive Money Flow:
  • 1) XLI 2) XLE 3) XLP 4) XLK 5) VFH
Charts:

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (ADI)/1.54
  • (CRL)/2.53
  • (CLH)/1.36
  • (ETSY)/.93
  • (GRMN)/2.05
  • (JLL)/6.01
  • (KRYS)/1.19
  • (LPX)/.86
  • (PSN)/.91
  • (TNL)/1.63
  • (WING)/.86
  • (WWW)/.42
After the Close: 
  • (CVNA)/.31
  • (CF)/1.54
  • (CAKE)/.92
  • (LOPE)/2.94
  • (HST)/.40
  • (JXN)/4.88
  • (KALU)/.41
  • (OII)/.40
  • (PAAS)/.36
  • (RGR)/.62
  • (TOST)/.17
  • (UTHR)/6.40
Economic Releases

8:30 am EST

  • Housing Starts for Jan. is estimated to fall to 1390K versus 1499K in Dec.
  • Building Permits for Jan. is estimated to fall to 1460K versus 1482K in Dec.
  • NY Fed Services Business Activity Index for Feb.

2:00 pm EST

  • Jan. 29th FOMC Meeting Minutes release.

Upcoming Splits

  • None of note
Other Potential Market Movers
  • The Fed's Jefferson speaking, Atlanta Fed GDPNow Q1 update, 20Y T-Bond auction, weekly US retail sale reports, weekly MBA Mortgage Applications report, weekly API crude oil stock report, Citi Industrial Tech/Mobility Conference, (RJF) annual meeting, (CPRI) investor day, (LRCX) investor day and the Barclays Industrial Select Conference 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 +14.2% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 15.4 unch.
  • 4 Sectors Declining, 7 Sectors Rising
  • 55.4% of Issues Advancing, 42.7% Declining 
  • TRIN/Arms .82 -45.3%
  • Non-Block Money Flow -$77.4M
  • 99 New 52-Week Highs, 47 New Lows
  • 57.6% (+.8%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 61.5 +2.4
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 78.0 +1.9%
  • Bloomberg Cyclicals/Defensives Index 249.8 +.1%
  • Russell 1000: Growth/Value 21,276.5 -.6%
  • CNN Fear & Greed Index 47.0 (NEUTRAL) +2.0
  • 1-Day Vix 8.5 -28.1%
  • Vix 15.5 +.7%
  • Total Put/Call .75 -42.8%