North American Investment Grade CDS Index 106.20 bps +3.61%
European Financial Sector CDS Index 121.17 bps +7.41%
Western Europe Sovereign Debt CDS Index 144.66 bps -.75%
Emerging Market CDS Index 237.69 bps +5.33%
2-Year Swap Spread 18.0 unch.
TED Spread 17.0 unch.
Economic Gauges:
3-Month T-Bill Yield .12% unch.
Yield Curve 212.0 -7 bps
China Import Iron Ore Spot $141.90/Metric Tonne -1.53%
Citi US Economic Surprise Index -33.40 +5.0 points
10-Year TIPS Spread 1.65% -3 bps
Overseas Futures:
Nikkei Futures: Indicating -106 open in Japan
DAX Futures: Indicating -10 open in Germany
Portfolio:
Lower: On gains in my Tech, Ag and Medical long positions
Disclosed Trades: Added (IWM)/(QQQQ) hedges, added to my (EEM) short
Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is mildly bearish as the S&P 500 gives back some of its recent gain on light volume. On the positive side, Steel, Gold, Software and Restaurant shares are higher on the day. The S&P GSCI Ag Spot Index is rising another +.93%. On the negative side, Education, Bank, Semi and Oil Tanker shares are under meaningful pressure, falling more than 2%. Cyclical and small-cap shares are underperforming. (XLF) has been heavy throughout the day. The Ireland sovereign cds is gaining another +11.30% to 374.41 bps. As well, the Spain sovereign cds is rising +6.11% to 239.55 bps, the Portugal sovereign cds is gaining +6.75% to 324.70 bps, the UK sovereign cds is soaring +15.43% to 77.05 bps and the Hungary sovereign cds is rising +5.6% to 372.27 bps. The 10-year yield is falling too much again, dropping -10 bps to 2.60%. The euro continues to trade very poorly. The rises in key cds indices are a big negative. However, given last week's large drops, today's moves aren't yet alarming. I will monitor these indices closely before further shifting market exposure. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bargain-hunting and buyout speculation.
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