Tuesday, May 28, 2024

Stocks Close Slightly Higher on Earnings Outlook Optimism, Technical Buying, Short-Covering, Tech/Commodity Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 13.1 +6.2%
  • DJIA Intraday % Swing .36 -20.0%
  • Bloomberg Global Risk On/Risk Off Index 65.4 +1.4%
  • Euro/Yen Carry Return Index 186.4 +.16%
  • Emerging Markets Currency Volatility(VXY) 6.8 -.6%
  • CBOE S&P 500 Implied Correlation Index 12.5 -3.9% 
  • ISE Sentiment Index 140.0 +22.0
  • Total Put/Call .83 unch.
  • NYSE Arms .68 -40.9%
  • NYSE Non-Block Money Flow -$276.52M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.1 +1.7%
  • US Energy High-Yield OAS 255.4 +.01%
  • Bloomberg TRACE # Distressed Bonds Traded 288 -14
  • European Financial Sector CDS Index 58.1 -.33%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 164.0 -.71%
  • Italian/German 10Y Yld Spread 131.0 basis points +3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 92.1 -.28%
  • Emerging Market CDS Index 164.6 +.8%
  • Israel Sovereign CDS 124.9 +.07%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.9 +.08%
  • 2-Year SOFR Swap Spread -11.0 basis points -2.0 basis points
  • Treasury Repo 3M T-Bill Spread 9.25 basis points +.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -2.5 unch.
  • MBS  5/10 Treasury Spread 144.0 +3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 727.0 unch.
  • Avg. Auto ABS OAS 56.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.9 +.01%
  • 3-Month T-Bill Yield 5.40% unch.
  • China Iron Ore Spot 118.1 USD/Metric Tonne +.22%
  • Dutch TTF Nat Gas(European benchmark) 33.5 euros/megawatt-hour -4.9%
  • Citi US Economic Surprise Index -5.20 +5.7 points
  • Citi Eurozone Economic Surprise Index 21.7 -4.3 points
  • Citi Emerging Markets Economic Surprise Index 13.8 -6.0 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(481 of 500 reporting) +7.8% +.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 257.24 +.37:  Growth Rate +12.8% +.1 percentage point, P/E 20.6 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.89% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +52.9% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 328.58 -.30: Growth Rate +22.5% -.1 percentage point, P/E 32.3 +.2
  • Bloomberg US Financial Conditions Index 1.40 +34.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .91 -15.0 basis points
  • US Yield Curve -43.5 basis points (2s/10s) +5.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.5% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 47.1% +.3 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.37% unch.
  • 10-Year TIPS Spread 2.34 +1.0 basis point
  • Highest target rate probability for July 31st FOMC meeting: 88.9%(unch.) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 53.7%(+3.5 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +65 open in Japan 
  • China A50 Futures: Indicating -20 open in China
  • DAX Futures: Indicating +37 open in Germany
Portfolio:
  • Slightly Lower:  On losses in my financial/industrial/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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