Broad Market Tone: - Advance/Decline Line: Slightly Higher
- Sector Performance: Most Sectors Rising
- Volume: Around Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst: - VIX 22.67 -1.35%
- ISE Sentiment Index 111.0 +2.78%
- Total Put/Call .90 -19.19%
- NYSE Arms .92 -35.35%
Credit Investor Angst:- North American Investment Grade CDS Index 94.44 -.68%
- European Financial Sector CDS Index 157.24 +7.49%
- Western Europe Sovereign Debt CDS Index 285.83 +.82%
- Emerging Market CDS Index 211.96 -1.71%
- 2-Year Swap Spread 22.0 +1 bp
- TED Spread 18.0 unch.
Economic Gauges:- 3-Month T-Bill Yield .07% unch.
- Yield Curve 253.0 -1 bp
- China Import Iron Ore Spot $175.40/Metric Tonne +.23%
- Citi US Economic Surprise Index -86.20 +3.0 points
- 10-Year TIPS Spread 2.45% +1 bp
Overseas Futures: - Nikkei Futures: Indicating +24 open in Japan
- DAX Futures: Indicating -11 open in Germany
Portfolio:
- Slightly Higher: On gains in my Technology, Retail and Biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and then added them back
- Market Exposure: 50% Net Long
BOTTOM LINE: Today's overall market action is bearish as the S&P 500 is trading at session lows, hovering below its 50-day moving average, despite better US economic data, recent equity losses, lower food prices and less financial sector pessimism. On the positive side, I-Banking, Tobacco, Road & Rail, Software and Oil Service shares are especially strong, rising .75%+. Oil is falling -.2%, copper is rising +.58% and the UBS-Bloomberg Ag Spot Index is down -1.51%. The Portugal sovereign cds is falling -4.68% to 912.82 bps and the Ireland sovereign cds is falling -7.42% to 776.31 bps. On the negative side, Airline, Education, Construction, Telecom, Networking, Disk Drive and Homebuilding 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 yesterday, are under pressure again today. The Networking Sub-Index is down -22.4% from its April 27th high. Rice is falling -2.4% today, but is still near a multi-year high, soaring about +27.0% in less than 3 weeks. The US price for a gallon of gas is +.01/gallon today to $3.71/gallon. It is up .57/gallon in less than 5 months. The Italy sovereign cds is jumping +4.67% to 298.88 bps, the France sovereign cds is rising +2.11% to 118.47 bps, the Belgium sovereign cds is rising +3.07% to 190.69 bps and the US sovereign cds is gaining +1.9% to 63.67 bps. The Italy sovereign cds has soared +84 bps in 5 days. The German, Spain and French sovereign cds are also near record highs. The Eurozone Financial Sector CDS Index is approaching record highs, as well. India's Sensex continues to trade very poorly, falling another -1.21% last night and is now down -11.21% ytd. German and French stocks fell -.86% and -.57%, respectively today, despite US stocks rallying hard off the open. The AAII % Bulls fell to 37.84, while the % bears rose to 31.42 this week, which is a negative considering current headwinds. The tone of the market is poor again today as volume picks up after the breach of key technical levels yesterday. 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 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 worries and emerging markets inflation fears.
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