Broad Market Tone: - Advance/Decline Line: Higher
- Sector Performance: Every Sector Rising
- Volume: Around Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst: - VIX 30.95 -5.47%
- ISE Sentiment Index 93.0 -30.60%
- Total Put/Call 1.12 -3.45%
- NYSE Arms .77 +36.25%
Credit Investor Angst:- North American Investment Grade CDS Index 122.57 -1.68%
- European Financial Sector CDS Index 223.88 -2.13%
- Western Europe Sovereign Debt CDS Index 332.49 -1.39%
- Emerging Market CDS Index 276.88 -5.39%
- 2-Year Swap Spread 34.0 unch.
- TED Spread 43.0 unch.
Economic Gauges:- 3-Month T-Bill Yield .00% unch.
- Yield Curve 183.0 +6 bps
- China Import Iron Ore Spot $122.70/Metric Tonne +1.91%
- Citi US Economic Surprise Index 13.60 -.4 point
- 10-Year TIPS Spread 2.09 -1 bp
Overseas Futures: - Nikkei Futures: Indicating +140 open in Japan
- DAX Futures: Indicating +24 open in Germany
Portfolio:
- Higher: On gains in my Tech, Retail, Biotech and Medical sector longs
- Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short, then added them back
- Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is bullish, as the S&P 500 trades near session highs despite Eurozone debt angst, rising global growth worries and rising food/energy prices. On the positive side, Defense, Coal, Disk Drive, Wireless, Construction and Education shares are especially strong, rising more than +3.0%. Small-caps are outperforming. Tech shares have traded well throughout the day. Major European equity indices rose 2-3% today. The 10-year yield is rising +8 bps to 2.06%. The France sovereign cds is falling -3.89% to 177.17 bps, the Portugal sovereign cds is falling -3.37% to 1,000.17 bps, the Ireland sovereign cds is down -3.62% to 702.0 bps, the Russia sovereign cds is down -4.78% to 206.0 bps and the Brazil sovereign cds is down -4.20% to 143.50 bps. On the negative side, Restaurant, Homebuilding and Insurance shares are undperforming, rising less than +.5%.
(XLF) has underperformed throughout the day. Gold is rising +1.64%, lumber is falling -1.15%, copper is flat, the UBS-Bloomberg Ag Spot Index is gaining +1.22% and oil is jumping +1.91%. Hong Kong stocks fell -2.5% overnight are are down -16.5% ytd. The China sovereign cds is up +3.9% to 146.22 bps and the Israel sovereign cds is up +1.9% to 165.14 bps. Rice is still close to its multi-year high, rising +26.8% in about 4 months. Despite equity gains today, the Italian 10-year yield was flat at 6.19%. The TED spread continues to trend higher and is near the highest since June 2010. The Libor-OIS spread is still very near the widest since July 2010. The 2-Year Euro Swap spread is still very near cycle highs today. The 3-month Euro Basis Swap is dropping -2.67 bps to -107.72 bps. The 3-month Euribor-OIS spread is surging +11 bps to 98.0 bps, which is the highest since March 2009 and is also noteworthy considering the recent strong equity advance. China Iron Ore Spot has plunged -36.06% since February 16th and -32.20% since Sept. 7th. The US scrap steel benchmark fell -3.98% today, which is the largest decline in months. The AAII % Bulls fell to 40.18 this week, while the % Bears rose to 29.62, which is still a negative given the macro backdrop. Many gauges of Eurozone credit angst are not confirming the strong move higher in equities off the bounce in the euro currency. The ECB's Mersch said over the last hour that economic activity in the Eurozone was in "freefall" and that the odds of recession are above 50%, which would very likely result in multiple sovereign downgrades in the region. However, equities continue to ignore negative news, which is a large positive. I expect US stocks to trade mixed-to-higher into the close from current levels on a bounce in the euro, less tech sector pessimism, short-covering, technical buying and bargain-hunting.
No comments:
Post a Comment