Thursday, May 16, 2024

Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Diminishing China Economy Fears, Technical Buying, Insurance/Food Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 12.6 +1.0%
  • DJIA Intraday % Swing .43 -28.4%
  • Bloomberg Global Risk On/Risk Off Index 63.3 -1.1%
  • Euro/Yen Carry Return Index 184.2 +.12%
  • Emerging Markets Currency Volatility(VXY) 6.9 -.58%
  • CBOE S&P 500 Implied Correlation Index 14.4 +2.0% 
  • ISE Sentiment Index 139.0 +3.0
  • Total Put/Call .76 -12.6%
  • NYSE Arms .95 -51.3%
  • NYSE Non-Block Money Flow -$147.5M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 49.1 +.24%
  • US Energy High-Yield OAS 257.7 -1.4%
  • Bloomberg TRACE # Distressed Bonds Traded 288 +1
  • European Financial Sector CDS Index 58.1 -.09%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 169.1 -1.7%
  • Italian/German 10Y Yld Spread 130.0 basis points -1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 93.6 -3.1%
  • Emerging Market CDS Index 157.2 +.52%
  • Israel Sovereign CDS 128.9 -.01%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.8 +.12%
  • 2-Year SOFR Swap Spread -9.0 basis points unch.
  • Treasury Repo 3M T-Bill Spread 10.0 basis points +1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -2.5 +.25 basis point
  • MBS  5/10 Treasury Spread 137.0 +3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 738.0 -5.0 basis points
  • Avg. Auto ABS OAS 60.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.9 +.09%
  • 3-Month T-Bill Yield 5.40% +1.0 basis point
  • China Iron Ore Spot 116.9 USD/Metric Tonne +.3%
  • Dutch TTF Nat Gas(European benchmark) 30.2 euros/megawatt-hour +1.7%
  • Citi US Economic Surprise Index -21.6 -3.4 points
  • Citi Eurozone Economic Surprise Index 20.1 -.2 point
  • Citi Emerging Markets Economic Surprise Index 23.0 -1.3 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(463 of 500 reporting) +5.3% -.2 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 255.73 +.10:  Growth Rate +14.7% +.1 percentage point, P/E 20.8 +.1
  • S&P 500 Current Year Estimated Profit Margin 12.89% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +37.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 327.04 +.15: Growth Rate +36.1% unch., P/E 31.9 +.2
  • Bloomberg US Financial Conditions Index 1.13 +3.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .79 -18.0 basis points
  • US Yield Curve -41.5 basis points (2s/10s) -3.75 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.6% -20.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.4% +.1 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.39% unch.
  • 10-Year TIPS Spread 2.32 unch.
  • Highest target rate probability for July 31st FOMC meeting: 70.4%(+1.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 50.7%(-2.8 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -290 open in Japan 
  • China A50 Futures: Indicating +37 open in China
  • DAX Futures: Indicating +55 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my biotech/tech sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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