Thursday, June 27, 2024

Stocks Reversing Slightly Higher into Close on Lower Long-Term Rates, Quarter-End Window Dressing, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 12.5 -.3%
  • DJIA Intraday % Swing .51 -22.4%
  • Bloomberg Global Risk On/Risk Off Index 57.8 +3.2%
  • Euro/Yen Carry Return Index 188.6 -.2%
  • Emerging Markets Currency Volatility(VXY) 7.8 -.6%
  • CBOE S&P 500 Implied Correlation Index 9.4 -.9% 
  • ISE Sentiment Index 173.0 +10.0
  • Total Put/Call .72 -1.4%
  • NYSE Arms 1.11 +11.0%
  • NYSE Non-Block Money Flow -$108.4M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 53.98 -.6%
  • US Energy High-Yield OAS 273.5 +1.1%
  • Bloomberg TRACE # Distressed Bonds Traded 262 -3
  • European Financial Sector CDS Index 72.61 +.13%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 184.2 +.12%
  • Italian/German 10Y Yld Spread 158.0 basis points +4.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 99.2 -1.0%
  • Emerging Market CDS Index 175.2 +1.6%
  • Israel Sovereign CDS 144.0 +7.1%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.15%
  • 2-Year SOFR Swap Spread -13.75 basis points unch.
  • Treasury Repo 3M T-Bill Spread 3.75 basis points -1.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.75 -1.25 basis points
  • MBS  5/10 Treasury Spread 148.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 721.0 +3.0 basis points
  • Avg. Auto ABS OAS 61.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.0 +.11%
  • 3-Month T-Bill Yield 5.37% unch.
  • China Iron Ore Spot 105.1 USD/Metric Tonne -.6%
  • Dutch TTF Nat Gas(European benchmark) 34.6 euros/megawatt-hour +2.2%
  • Citi US Economic Surprise Index -29.2 -2.3 points
  • Citi Eurozone Economic Surprise Index -16.2 -2.5 points
  • Citi Emerging Markets Economic Surprise Index 12.9 +2.2 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +22.1% +15.9 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.53 -.14:  Growth Rate +14.2% -.1 percentage point, P/E 21.0 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.86% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 328.71 +.10: Growth Rate +22.5% unch., P/E 34.6 +.3
  • Bloomberg US Financial Conditions Index 1.04 +8.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .47 -8.0 basis points
  • US Yield Curve -42.75 basis points (2s/10s) +.5 basis point
  • US Atlanta Fed 2Q GDPNow Forecast +2.7% -30.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 53.6% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.12% unch.
  • 10-Year TIPS Spread 2.27 +1.0 basis point
  • Highest target rate probability for Sept. 18th FOMC meeting: 57.9%(+1.6 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 49.9%(-.1 percentage point) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +303 open in Japan 
  • China A50 Futures: Indicating -194 open in China
  • DAX Futures: Indicating +190 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial/biotech/tech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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