Thursday, March 18, 2010

Stocks Just Slightly Lower into Final Hour on Healthcare Reform Fears, Rising Sovereign Debt Angst, Fed Rate Hike Rumors

Broad Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume: Slightly Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 16.50 -2.42%
  • ISE Sentiment Index 114.0 -17.39%
  • Total Put/Call .77 -9.41%
  • NYSE Arms 1.61 +44.40%
Credit Investor Angst:
  • North American Investment Grade CDS Index 83.89 bps +2.47%
  • European Financial Sector CDS Index 74.16 bps +6.44%
  • Western Europe Sovereign Debt CDS Index 73.31 bps +8.25%
  • Emerging Market CDS Index 211.29 bps +.15%
  • 2-Year Swap Spread 18.50 bps +1.0 bp
  • TED Spread 12.0 bps unch.
Economic Gauges:
  • 3-Month T-Bill Yield .15% unch.
  • Yield Curve 271.0 bps -1 bp
  • Copper Days Demand 15.04 days -.19%
  • Citi US Economic Surprise Index +37.70 +.7 point
  • 10-Year TIPS Spread 2.24% -1 bp
Overseas Futures:
  • Nikkei Futures: Indicating +31 open in Japan
  • DAX Futures: Indicating +10 open in Germany
  • Slightly Lower: On weakness in my Financial and Tech long positions
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is mildly bullish as the major averages are mixed despite a meaningful rise in various cds, fed discount rate hike rumors, healthcare reform fears and declining commodity stocks. On the positive side, the Transports are substantially outperforming, rising 1.0%. Education, HMO, Hospital and Wireless shares are also strong, rising .75%+. US Economic data continue to show mostly improving trends. On the negative side, Gaming, Construction, Bank, Networking, Steel, Oil Service, Energy, Alt Energy and Coal stocks are under pressure, falling more than -1.0%. I am surprised at the market's resilience today, given the news. The NYSE Arms has been very high most of the day, yet the major averages are near session highs, indicating a lack of firepower from the bears. Market action tomorrow on option expiration and early next week should give us a better indication of the direction of the market's next meaningful move. (AAPL) is moving to session highs on volume today, reversing morning losses, after the WSJ reported they have sold hundreds of thousands of iPads in advance of its official release. I still view the shares as very attractive around current levels. I expect US stocks to trade modestly higher into the close from current levels on short-covering, less economic fear and technical buying.


Anonymous said...

Gary said...