Thursday, May 09, 2024

Stocks Rising into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Commodity/Telecom Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.0 -.4%
  • DJIA Intraday % Swing .78 +79.5%
  • Bloomberg Global Risk On/Risk Off Index 65.1 +1.3%
  • Euro/Yen Carry Return Index 182.9 +.3%
  • Emerging Markets Currency Volatility(VXY) 6.97 +.58%
  • CBOE S&P 500 Implied Correlation Index 16.7 +.7% 
  • ISE Sentiment Index 151.0 +12.0
  • Total Put/Call .85 -11.5%
  • NYSE Arms 1.06 +26.2%
  • NYSE Non-Block Money Flow +$70.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.4 +.01%
  • US Energy High-Yield OAS 260.79 +1.6%
  • Bloomberg TRACE # Distressed Bonds Traded 280 +1
  • European Financial Sector CDS Index 59.5 +.12%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 179.9 -1.4%
  • Italian/German 10Y Yld Spread 134.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 103.2 +.46%
  • Emerging Market CDS Index 161.89 -.24%
  • Israel Sovereign CDS 129.3 +4.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.64 +.16%
  • 2-Year SOFR Swap Spread -8.25 basis points +.25 basis points
  • Treasury Repo 3M T-Bill Spread 9.5 basis points +1.0 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.0 unch.
  • MBS  5/10 Treasury Spread 140.0 -4.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 753.0 -5.0 basis points
  • Avg. Auto ABS OAS 59.0 +2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.7 +.08%
  • 3-Month T-Bill Yield 5.40% +1.0 basis point
  • China Iron Ore Spot 115.4 USD/Metric Tonne -.4%
  • Dutch TTF Nat Gas(European benchmark) 30.9 euros/megawatt-hour +.8%
  • Citi US Economic Surprise Index -11.5 -4.1
  • Citi Eurozone Economic Surprise Index 25.0 -.7 point
  • Citi Emerging Markets Economic Surprise Index 27.4 -.4 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(455 of 500 reporting) +5.5% +.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 255.13 +.20:  Growth Rate +14.4% +.1 percentage point, P/E 20.4 +.1
  • S&P 500 Current Year Estimated Profit Margin 12.91% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +37.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 325.75 +.26: Growth Rate +35.6% +.1 percentage point, P/E 31.1 -.2
  • Bloomberg US Financial Conditions Index 1.13 unch.
  • Bloomberg Euro-Zone Financial Conditions Index 1.03 -4.0 basis points
  • US Yield Curve -36.0 basis points (2s/10s) -1.0 basis point
  • US Atlanta Fed 2Q GDPNow Forecast +4.2% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 46.5% -.5 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% unch.
  • 10-Year TIPS Spread 2.34 +1.0 basis points
  • Highest target rate probability for July 31st FOMC meeting: 65.1%(-3.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 48.8%(-.1 percentage point) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +361 open in Japan 
  • China A50 Futures: Indicating +81 open in China
  • DAX Futures: Indicating +151 open in Germany
Portfolio:
  • Higher:  On gains in my financial/consumer discretionary/biotech/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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