Tuesday, July 30, 2024

Stocks Lower into Final Hour on Escalating Mid-East Tensions, Sector Rotation, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 17.2 +3.8%
  • DJIA Intraday % Swing .62 -14.3%
  • Bloomberg Global Risk On/Risk Off Index 49.8 -3.0%
  • Euro/Yen Carry Return Index 182.2 -.6%
  • Emerging Markets Currency Volatility(VXY) 7.55 +.13%
  • CBOE S&P 500 Implied Correlation Index 15.4 +7.9% 
  • ISE Sentiment Index 136.0 +4.0
  • Total Put/Call 1.04 +15.6%
  • NYSE Arms 1.23 unch.
  • NYSE Non-Block Money Flow +$126.3M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.9 +2.2%
  • US Energy High-Yield OAS 283.3 +3.1%
  • Bloomberg TRACE # Distressed Bonds Traded 246 +5
  • European Financial Sector CDS Index 62.7 +.3%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 163.8 +.96%
  • Italian/German 10Y Yld Spread 136.0 basis points +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 96.3 +.05%
  • Emerging Market CDS Index 168.40 +.45%
  • Israel Sovereign CDS 128.2 +.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.9 +.07%
  • 2-Year SOFR Swap Spread -16.0 basis points -.75 basis point
  • Treasury Repo 3M T-Bill Spread -5.0 basis points +.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
  • MBS  5/10 Treasury Spread 142.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 687.0 +2.0 basis points
  • Avg. Auto ABS OAS 61.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.0 +.01%
  • 3-Month T-Bill Yield 5.28% -1.0 basis point
  • China Iron Ore Spot 99.9 USD/Metric Tonne +.8%
  • Dutch TTF Nat Gas(European benchmark) 34.4 euros/megawatt-hour +1.4%
  • Citi US Economic Surprise Index -25.5 +3.8 points
  • Citi Eurozone Economic Surprise Index -53.4 +2.3 points
  • Citi Emerging Markets Economic Surprise Index -5.4 -1.9 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(238 of 500 reporting) +10.1% +3.8 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 262.94 +.09:  Growth Rate +15.1% unch., P/E 20.6 -.2
  • S&P 500 Current Year Estimated Profit Margin 12.78% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +19.8% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 336.53 +.39: Growth Rate +25.5% +.2 percentage point, P/E 32.1 -.7
  • Bloomberg US Financial Conditions Index .77 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index .77 +2.0 basis points
  • US Yield Curve -21.5 basis points (2s/10s) unch.
  • US Atlanta Fed 3Q GDPNow Forecast +2.83% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 60.9% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.73% unch.: CPI YoY +3.01% unch.
  • 10-Year TIPS Spread 2.24 -1.0 basis point
  • Highest target rate probability for Sept. 18th FOMC meeting: 87.7%(-.5 percentage point) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 57.8%(+.3 percentage point) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -390 open in Japan 
  • China A50 Futures: Indicating -58 open in China
  • DAX Futures: Indicating +123 open in Germany
Portfolio:
  • Higher:  On gains in my consumer discretionary/industrial/financial sector longs, emerging market shorts and index hedges
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
  • Market Exposure: 50% Net Long

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