Wednesday, May 01, 2024

Stocks Surging into Final Hour on Rising Fed Rate-Cut Odds, Earnings Outlook Optimism, Short-Covering, Financial/Biotech Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 15.6-.19%
  • DJIA Intraday % Swing .48 -52.4%
  • Bloomberg Global Risk On/Risk Off Index 63.3 -6.4%
  • Euro/Yen Carry Return Index 183.4 unch.
  • Emerging Markets Currency Volatility(VXY) 7.07 +.43%
  • CBOE S&P 500 Implied Correlation Index 19.7 +9.1% 
  • ISE Sentiment Index 138.0 +24.0
  • Total Put/Call .98 +4.3%
  • NYSE Arms .92 -43.6%
  • NYSE Non-Block Money Flow -$107.7M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.5 -1.9%
  • US Energy High-Yield OAS 264.2 +1.5%
  • Bloomberg TRACE # Distressed Bonds Traded 291 +6
  • European Financial Sector CDS Index 64.7 +2.0%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 192.0 +1.6%
  • Italian/German 10Y Yld Spread 133.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 113.7 +1.7%
  • Emerging Market CDS Index 172.3 -3.1%
  • Israel Sovereign CDS 131.9 -.9%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.4 +.1%
  • 2-Year SOFR Swap Spread -6.25 basis points +1.0 basis point
  • Treasury Repo 3M T-Bill Spread 9.75 basis points +1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.75 unch.
  • MBS  5/10 Treasury Spread 149.0 -2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 771.0 -2.0 basis points
  • Avg. Auto ABS OAS 58.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.3 +.08%
  • 3-Month T-Bill Yield 5.41% +1.0 basis point
  • China Iron Ore Spot 116.2 USD/Metric Tonne +.6%
  • Dutch TTF Nat Gas(European benchmark) 28.7 euros/megawatt-hour -1.3%
  • Citi US Economic Surprise Index 2.0 -5.6 points
  • Citi Eurozone Economic Surprise Index 28.7 -1.2 points
  • Citi Emerging Markets Economic Surprise Index 32.7 -1.4 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(309 of 500 reporting) +5.2% +1.6 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 254.20 +.52:  Growth Rate +13.9% +.2 percentage point, P/E 19.7 -.3
  • S&P 500 Current Year Estimated Profit Margin 12.88% +3.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +57.2% +14.8 percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 319.89 +.73: Growth Rate +33.1% +.3 percentage point, P/E 30.2 -.7
  • Bloomberg US Financial Conditions Index 1.02 +6.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .94 -1.0 basis point
  • US Yield Curve -33.75 basis points (2s/10s) +2.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.9% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 39.5% -1.1 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% unch.
  • 10-Year TIPS Spread 2.37 -3.0 basis points
  • Highest target rate probability for June 12th FOMC meeting: 82.5%(-7.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 69.7%(-7.5 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +212 open in Japan 
  • China A50 Futures: Indicating +6 open in China
  • DAX Futures: Indicating +163 open in Germany
Portfolio:
  • Higher:  On gains in my tech/industrial/financial/consumer discretionary sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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