Broad Market Tone: - Advance/Decline Line: Lower
- Sector Performance: Mixed
- Volume: Above Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst: - VIX 25.02 +5.39%
- ISE Sentiment Index 123.0 +28.13%
- Total Put/Call 1.23 +32.26%
- NYSE Arms .90 -18.70%
Credit Investor Angst:- North American Investment Grade CDS Index 95.48 +1.10%
- European Financial Sector CDS Index 150.50 +3.0%
- Western Europe Sovereign Debt CDS Index 284.50 -.47%
- Emerging Market CDS Index 213.43 +.96%
- 2-Year Swap Spread 23.0 +1 bp
- TED Spread 17.0 -1 bp
Economic Gauges:- 3-Month T-Bill Yield .08% +1 bp
- Yield Curve 243.0 -10 bps
- China Import Iron Ore Spot $175.50/Metric Tonne +.06%
- Citi US Economic Surprise Index -91.40 -5.2 points
- 10-Year TIPS Spread 2.43% -2 bps
Overseas Futures: - Nikkei Futures: Indicating +7 open in Japan
- DAX Futures: Indicating -2 open in Germany
Portfolio:
- Higher: On gains in my Retail, Medical and Biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
- Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is bearish as the S&P 500 is hovering just above its 200-day moving average on rising eurozone debt angst, US debt ceiling concerns, more poor US economic data, emerging market inflation fears and global growth worries. On the positive side, Defense, Medical, Biotech, Hospital, Construction and Homebuilding shares are especially strong, rising .50%+. Oil is falling -1.29%, copper is rising +.29% and the UBS-Bloomberg Ag Spot Index is down -1.54%. On the negative side, Disk Drive, Semi, Computer, Utility, Energy, Agriculture, Internet, Networking, Gaming and Airline shares are under pressure, falling more than -.75%. Cyclicals are underperforming again.
The industrials(ETF:XLI), after breaking down through their 200-day moving average on volume recently, remain unable to bounce. The Networking Sub-Index is down -23.1% from its April 27th high. Rice is falling -1.7% today, but is still near a multi-year high, soaring about +25.0% in less than 3 weeks. The US price for a gallon of gas is unch. today at $3.71/gallon. It is up .57/gallon in less than 5 months. The Italy sovereign cds is jumping +3.85% to 310.52 bps, the France sovereign cds is rising +3.01% to 122.12 bps, the Germany sovereign cds is gaining +2.03% to 64.17 bps, the Spain sovereign cds is surging +5.2% to 363.59 bps, the Belgium sovereign cds is rising +4.12% to 198.47 bps and the US sovereign cds is gaining +.8% to 64.18 bps. The Italy sovereign cds has soared +95 bps in 6 days. The German sovereign cds is hitting a multi-year high today. Spain, Italy and French sovereign cds are very near all-time highs. The Eurozone Financial Sector CDS Index is approaching record highs, as well. Australian stocks broke below technical support last night and are down -7.1% ytd. French stocks fell another -1.07% today and are back to their pre-Greek debt deal lows. Some US politicians efforts to spook the equity and bond markets continue to have some success, however I still suspect that a larger portion of recent stock losses are the result of ongoing European debt concerns, lowered forward earnings guidance and emerging market growth/inflation worries than most investors perceive. I expect stocks to see a large surge higher on any US debt deal resolution, however gains may prove unsustainable unless other still developing headwinds subside very soon. I expect US stocks to trade mixed-to-lower into the close from current levels on rising eurozone debt angst, global growth worries, US debt ceiling concerns, earnings jitters and emerging markets inflation fears.
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