Stocks Slightly Lower into Afternoon on Rising Emerging Markets Debt Angst, More Global Growth Fears, Yen Strength, Homebuilding/Retail Sector Weakness
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 14.67 -.88%
- Euro/Yen Carry Return Index 148.98 unch.
- Emerging Markets Currency Volatility(VXY) 8.83 -.90%
- S&P 500 Implied Correlation 55.30 -.47%
- ISE Sentiment Index 89.0 +3.49%
- Total Put/Call .90 +9.76%
Credit Investor Angst:
- North American Investment Grade CDS Index 64.89 +1.34%
- European Financial Sector CDS Index 89.34 +2.78%
- Western Europe Sovereign Debt CDS Index 49.01 +2.64%
- Asia Pacific Sovereign Debt CDS Index 100.41 +2.16%
- Emerging Market CDS Index 324.98 +2.16%
- China Blended Corporate Spread Index 365.73 +.58%
- 2-Year Swap Spread 13.75 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -4.0 unch.
Economic Gauges:
- 3-Month T-Bill Yield .04% unch.
- Yield Curve 236.0 -3.0 basis points
- China Import Iron Ore Spot $107.40/Metric Tonne +2.38%
- Citi US Economic Surprise Index -34.10 -.5 point
- Citi Emerging Markets Economic Surprise Index 3.60 +.6 point
- 10-Year TIPS Spread 2.19 -2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating -50 open in Japan
- DAX Futures: Indicating -1 open in Germany
Portfolio:
- Higher: On gains in my biotech/tech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
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The five year long running bull stock market has finally turned to a bear stock market.
On Thursday March 13, 204, a see saw destruction of equity investments and credit investments got strongly underway, beginning the first investment storm of Kondratieff Winter, the final phase of the Business Cycle.
The long running bull stock market turned to a bear stock market as Nation Investment, EFA, traded lower on fears of growing Russia and Europe conflict over Crimea, news that China will pilot five private banks, and that Italy’s UniCredit bank recorded a severe loss. The pivotal investment change is seen in the market vane, Call Write Bonds, CWB, trading lower parabolically lower in value from its market high.
Liberalism’s twin spigots of investment liquidity, turned toxic. The Euro Yen Currency Carry Trade, EUR/JPY, traded lower, as the Euro, FXE, manifested bearish engulfing, and traded slightly lower, from its recent high of 137.40 while the Yen, FXY, traded strongly higher. And debt trades such as Junk Bonds, JNK, Leveraged Buyouts, PSP, and Real Estate Rental Investment Company, Blackstone, BX, traded lower.
Nation Investment, EFA, traded 1.8%, lower. Small Cap Nation Investment, SCZ -1.5%, leading World Stocks, VT -1.4% lower, and Global Financials, IXG -1.2% lower, with Emerging Market Financials, EMFN -2.9%, Chinese Financials, CHIX, -2.3%, with China News Service reporting China To Pilot Five Private Banks, and European Financials, EUFN, -2,0%, with Bloomberg reporting Italy’s UniCredit Posts Record Loss, Plans 8,500 Job Cuts
Nations trading lower included German Small Caps, GERJ, -4.6, Russia, RSX, -4.5, Russia Small Caps, ERUS -4.5%, Poland, EPOL, -3.3%, China, YAO -2.7%, India, INP -2.5%, Germany, EWG -2.8%, Eurozone, EZU -2.7%, with Daily Mail UK reporting Red Army Masses 80,000 Troops On Ukraine Border, with Zero Hedge reporting German Stocks Collapse To 3-Month Lows As Russia Nears Bear Market, and with Reuters reporting Merkel Warns Of Catastrophe.
Sectors trading lower included Social Media, SOCL -3.6%, Solar Energy, TAN -3.4%, Biotechnology, IBB -2.6%, Nasdaq Internet, PNQI, -2.5, Internet Retail, FDN -2.1%, Resorts and Casinos, BJK -2.0%, Automobiles, CARZ, -2.0%.
Utilities, XLU, traded higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.65%, which took Aggregate Credit, AGG, higher, led so by the 30 Year US Government Bond, EDV, and the US Ten Year Note, TLT.
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