Monday, October 03, 2022

Stocks Surging into Afternoon on Less Hawkish Fed Hopes, Lower Long-Term Rates, Less European/Emerging Markets/US High-Yield Debt Angst, Commodity/Tech Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume:  Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 30.2 -4.6%
  • DJIA Intraday % Swing 1.95%
  • Bloomberg Global Risk On/Risk Off Index 43.2 -4.7%
  • Euro/Yen Carry Return Index 146.02 unch.
  • Emerging Markets Currency Volatility(VXY) 12.3 -1.2%
  • CBOE S&P 500 Implied Correlation Index 48.9 +.8% 
  • ISE Sentiment Index 109.0 +12.0 points
  • Total Put/Call .94 -14.6%
  • NYSE Arms .89 -4.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 104.42 -3.14%
  • US Energy High-Yield OAS 455.06 +1.86%
  • Bloomberg TRACE # Distressed Bonds Traded 450.0 +39.0
  • European Financial Sector CDS Index 146.30 -1.6%
  • Italian/German 10Y Yld Spread 233.0 basis points -8.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 186.83 +.6%
  • Emerging Market CDS Index 315.20 -4.75%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.59 +.41%
  • 2-Year Swap Spread 30.0 basis points +.75 basis point
  • TED Spread 50.75 basis points +5.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -67.75 basis points -1.5 basis points
  • MBS  5/10 Treasury Spread  170.0 -3.0 basis points
  • iShares CMBS ETF 46.17 +.91%
  • Avg. Auto ABS OAS .66 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 47.38 +.67%
  • 3-Month T-Bill Yield 3.22% -7.0 basis points
  • Yield Curve -44.75 basis points (2s/10s) -3.0 basis points
  • China Iron Ore Spot 92.45 USD/Metric Tonne -1.3%
  • Dutch TTF Nat Gas(European benchmark) 169.0 euros/megawatt-hour -10.5%
  • Citi US Economic Surprise Index 10.4 -7.5 points
  • Citi Eurozone Economic Surprise Index -.6 -.8 point
  • Citi Emerging Markets Economic Surprise Index -4.3 +.1 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.0 -.05:  Growth Rate +15.7% -.1 percentage point, P/E 15.6 +.2
  • Bloomberg US Financial Conditions Index -1.49 -14.0 basis points
  • US Atlanta Fed GDPNow Forecast +2.28% -15.0 basis points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  • 10-Year TIPS Spread 2.20 +5.0 basis points
  • Highest target rate probability for December 14th FOMC meeting: 54.4%(+.5 percentage point) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 46.4%(+.8 percentage points) chance of 4.25%-4.5%.
US Covid-19:
  • 98 new infections/100K people(last 7 days total). 5.6%(-.4 percentage point) of 1/14/22 peak(1,740) -7/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -84.1%(-.7 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +409 open in Japan 
  • China A50 Futures: Indicating -30 open in China
  • DAX Futures: Indicating +30 open in Germany
Portfolio:
  • Higher:  On gains in my tech/utility/industrial/medical/commodity sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure:  Moved to 75% net long

Bear Radar

Style Underperformer:

  • Small-Cap Value -3.0%
Sector Underperformers:
  • 1) REITs -.2% 2) Education -.2% 3) Electric Vehicles +.1%
Stocks Falling on Unusual Volume: 
  • MDB and APLS
Stocks With Unusual Put Option Activity:
  • 1) BGS 2) APRN 3) HTGC 4) VRAY 5) JBLU
Stocks With Most Negative News Mentions:
  • 1) APRN 2) KRBP 3) OLO 4) NCMI 5) ENFN
Charts:

Bull Radar

Style Outperformer:

  • Mid-Cap Value +2.4%
Sector Outperformers:
  • 1) Steel +6.0% 2) Oil Service +5.7% 3) Networking +4.0%
Stocks Rising on Unusual Volume:
  • VSAT, VRT, IDCC, FRPT, BOX, APA, RCII, BZH, MLKN, WTRG, TCDA, LEVI, FLR, B, WEX, GNK, LBRDK, UNFI, REGN, DGII, GBX, KMX, CHTR, AB, APG, T, TPVG, ECC, FLT, PTY, GMS, AKAM, TDW, MTG, NZF, ORCC and ARCC
Stocks With Unusual Call Option Activity:
  • 1) CLR 2) EXC 3) SCO 4) BAX 5) XLU
Stocks With Most Positive News Mentions:
  • 1) MYOV 2) LVWR 3) OVV 4) DVN 5) MRO

Morning Market Internals

NYSE Composite Index:

  • Volume Running +10.2% Above 100-Day Average 
  • 2 Sectors Declining, 9 Sectors Rising
  • 80.9% of Issues Advancing, 14.2% Declining
  • 10 New 52-Week Highs, 190 New Lows
  • 19.0%(+14.3%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 38.0 +7.0
  • Bloomberg Global Risk-On/Risk-Off Index 42.6 -6.0%
  • Russell 1000: Growth/Value 15,393.1 -.56%
  • Vix 30.0 -5.0%
  • Total Put/Call .88 -20.0%
  • TRIN/Arms 1.13 +21.5% 

Sunday, October 02, 2022

Monday Watch

Night Trading

  • Asian indices are -1.0% to -.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 187.25 -.5 basis point.
  • China Sovereign CDS 109.5 -4.75 basis points.
  • Bloomberg Emerging Markets Currency Index 47.05 unch.
  • Bloomberg Global Risk-On/Risk Off Index 45.6 +.6%.
  • Bloomberg US Financial Conditions Index -1.44 -9.0 basis points 
  • Volatility Index(VIX) futures 31.3 +.73%. 
  • Euro Stoxx 50 futures -2.23%.
  • S&P 500 futures -.63%.
  • NASDAQ 100 futures -1.04%.

Earnings of Note
Company/Estimate

Before the Open:
  • None of note
After the Close:
  • None of note
Economic Releases
10:00 am EST
  • Construction Spending MoM for Aug. is estimated to fall -.2% versus a -.4% decline in July. 
  • ISM Manufacturing for Sept. is estimated to fall to 52.3 versus 52.8 in Aug.
  • ISM Prices Paid for Sept. is estimated to fall to 52.0 versus 52.5 in Aug.
Afternoon:
  • Wards Total Vehicle Sales for Sept. is estimated to rise to 13.5M versus 13.18M in Aug.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone PMI report, (ILMN) investor day and the (SBGI) investor day could also impact trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 25% net long heading into the week.

Saturday, October 01, 2022

Today's Headlines

Bloomberg:

Wall Street Journal:
Barron's:
  • Had bullish commentary on (OWL), (SEAT), (CHPT), (LAZR), (VCSA) and (OLPX).

Fox News:

CNBC:
Zero Hedge:
MarketWatch.com:             
NewsMax:  
TheGatewayPundit.com:
The Epoch Times: 
Twitter:
OpenVAERS:
SKirsch.com:

Friday, September 30, 2022

Evening Headlines

Bloomberg:
Wall Street Journal:

Fox News:

CNBC:
Zero Hedge:
MarketWatch.com:              
NewsMax:
TheGatewayPundit.com:
The Epoch Times:
OpenVAERS:
SKirsch.com:
Covid-19(Data, Maps, Graphs):