Wednesday, June 12, 2024

Stocks Surging into Final Hour on Long-Term Rate Plunge, Rising Fed Rate-Cut Odds, Earnings Outlook Optimism, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 12.3 -4.0%
  • DJIA Intraday % Swing .77 -14.2%
  • Bloomberg Global Risk On/Risk Off Index 60.9 -3.8%
  • Euro/Yen Carry Return Index 185.1 +.3%
  • Emerging Markets Currency Volatility(VXY) 7.8 +3.4%
  • CBOE S&P 500 Implied Correlation Index 10.3 -16.6% 
  • ISE Sentiment Index 134.0 -7.0
  • Total Put/Call .77 -11.5%
  • NYSE Arms 1.78 +34.6%
  • NYSE Non-Block Money Flow +$76.2M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 49.2 -2.8%
  • US Energy High-Yield OAS 267.3 -1.0%
  • Bloomberg TRACE # Distressed Bonds Traded 301 +8
  • European Financial Sector CDS Index 61.2 -4.4%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 169.1 -2.5%
  • Italian/German 10Y Yld Spread 139.0 basis points -6.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 96.2 -.1%
  • Emerging Market CDS Index 165.1 -.91%
  • Israel Sovereign CDS 123.0 -.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.84 -.14%
  • 2-Year SOFR Swap Spread -13.25 basis points -.75 basis point
  • Treasury Repo 3M T-Bill Spread 7.0 basis points +2.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.0 +.25 basis point
  • MBS  5/10 Treasury Spread 138.0 -6.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 724.0 -1.0 basis point
  • Avg. Auto ABS OAS 57.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.4 +.22%
  • 3-Month T-Bill Yield 5.38% +2.0 basis points
  • China Iron Ore Spot 106.1 USD/Metric Tonne +1.4%
  • Dutch TTF Nat Gas(European benchmark) 35.3 euros/megawatt-hour +2.9%
  • Citi US Economic Surprise Index -9.9 -3.8 points
  • Citi Eurozone Economic Surprise Index 27.9 -.2 point
  • Citi Emerging Markets Economic Surprise Index 7.3 +1.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(498 of 500 reporting) +7.8% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 258.83 +.10:  Growth Rate +13.5% +.1 percentage point, P/E 21.0 +.3
  • S&P 500 Current Year Estimated Profit Margin 12.85% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +52.9% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 331.99 +.25: Growth Rate +23.8% +.1 percentage point, P/E 33.0 +.9
  • Bloomberg US Financial Conditions Index .89 -19.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .94 -7.0 basis points
  • US Yield Curve -45.25 basis points (2s/10s) -2.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.1% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 50.2% +1.5 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.69% unch.: CPI YoY +3.36% unch.
  • 10-Year TIPS Spread 2.24 -5.0 basis points
  • Highest target rate probability for July 31st FOMC meeting: 91.1%(+3.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 58.2%(+11.4 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +454 open in Japan 
  • China A50 Futures: Indicating -30 open in China
  • DAX Futures: Indicating +20 open in Germany
Portfolio:
  • Higher:  On gains in my industrial/consumer discretionary/financial/tech/biotech sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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