Tuesday, May 07, 2024

Stocks Slightly Higher into Close on Lower Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Healthcare/Utility Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.4 -.7%
  • DJIA Intraday % Swing .30 -40.0%
  • Bloomberg Global Risk On/Risk Off Index 64.8 -3.4%
  • Euro/Yen Carry Return Index 181.3 +.4%
  • Emerging Markets Currency Volatility(VXY) 6.87 -.43%
  • CBOE S&P 500 Implied Correlation Index 17.1 +.8% 
  • ISE Sentiment Index 134.0 -4.0
  • Total Put/Call 1.01 -22.9%
  • NYSE Arms 1.63 +44.2%
  • NYSE Non-Block Money Flow +$16.4M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.31 +.24%
  • US Energy High-Yield OAS 255.62 +1.53%
  • Bloomberg TRACE # Distressed Bonds Traded 273 -11
  • European Financial Sector CDS Index 59.6 -2.3%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 182.9 -2.4%
  • Italian/German 10Y Yld Spread 134.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 100.8 -1.8%
  • Emerging Market CDS Index 161.4 +.9%
  • Israel Sovereign CDS 130.7 +.1%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 unch.
  • 2-Year SOFR Swap Spread -8.75 basis points -.25 basis points
  • Treasury Repo 3M T-Bill Spread 9.0 basis points +.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.75 -.25 basis point
  • MBS  5/10 Treasury Spread 143.0 -3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 760.0 +1.0 basis point
  • Avg. Auto ABS OAS 58.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.7 -.08%
  • 3-Month T-Bill Yield 5.39% unch.
  • China Iron Ore Spot 118.1 USD/Metric Tonne -.09%
  • Dutch TTF Nat Gas(European benchmark) 31.07 euros/megawatt-hour -2.3%
  • Citi US Economic Surprise Index -7.5 unch.
  • Citi Eurozone Economic Surprise Index 25.8 -1.2 points
  • Citi Emerging Markets Economic Surprise Index 29.7 -1.6 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(425 of 500 reporting) +5.6% +.5 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 254.82 -.11:  Growth Rate +14.2% -.1 percentage point, P/E 20.4 +.2
  • S&P 500 Current Year Estimated Profit Margin 12.89% -3.0 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 325.48 +.09: Growth Rate +35.5% +.1 percentage point, P/E 31.3 +.2
  • Bloomberg US Financial Conditions Index 1.13 +4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.00 +6.0 basis points
  • US Yield Curve -37.0 basis points (2s/10s) -2.5 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.3% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 47.8% -.2 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% unch.
  • 10-Year TIPS Spread 2.32 -3.0 basis points
  • Highest target rate probability for July 31st FOMC meeting: 70.4%(+1.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 49.0%(+.1 percentage point) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -85 open in Japan 
  • China A50 Futures: Indicating +21 open in China
  • DAX Futures: Indicating +160 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial/consumer discretionary/biotech
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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