Thursday, July 25, 2024

Stocks Slightly Higher into Final Hour on Positive US Economic Data, Earnings Outlook Optimism, Lower Long-Term Rates, Energy/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Declining
  • Volume: Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 17.3 -4.2%
  • DJIA Intraday % Swing 1.40 +81.8%
  • Bloomberg Global Risk On/Risk Off Index 52.8 +.05%
  • Euro/Yen Carry Return Index 183.6 +.12%
  • Emerging Markets Currency Volatility(VXY) 7.8 +3.3%
  • CBOE S&P 500 Implied Correlation Index 15.3 -3.6% 
  • ISE Sentiment Index 130.0 -6.0
  • Total Put/Call .89 -11.9%
  • NYSE Arms 1.41 +95.8%
  • NYSE Non-Block Money Flow +$146.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 51.5 -.19%
  • US Energy High-Yield OAS 269.4 -.16%
  • Bloomberg TRACE # Distressed Bonds Traded 244 -3
  • European Financial Sector CDS Index 63.8 +2.4%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 165.3 +2.4%
  • Italian/German 10Y Yld Spread 136.0 basis points +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 98.7 +3.6%
  • Emerging Market CDS Index 169.3 -.14%
  • Israel Sovereign CDS 128.0 -.04%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.0 unch.
  • 2-Year SOFR Swap Spread -16.0 basis points -1.25 basis points
  • Treasury Repo 3M T-Bill Spread -3.0 basis points -1.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -1.0 basis point
  • MBS  5/10 Treasury Spread 145.0 -1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 684.0 -4.0 basis points
  • Avg. Auto ABS OAS 59.0 -2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.1 -.13%
  • 3-Month T-Bill Yield 5.30% -3.0 basis points
  • China Iron Ore Spot 102.4 USD/Metric Tonne +2.5%
  • Dutch TTF Nat Gas(European benchmark) 31.8 euros/megawatt-hour -2.6%
  • Citi US Economic Surprise Index -33.4 +1.7 points
  • Citi Eurozone Economic Surprise Index -53.4 -7.7 points
  • Citi Emerging Markets Economic Surprise Index -4.4 -3.9 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(180 of 500 reporting) +6.3% +1.3 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 262.38 +.04:  Growth Rate +14.9% unch., P/E 20.8 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.79% -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 335.01 -.51: Growth Rate +24.9% -.2 percentage point, P/E 32.8 unch.
  • Bloomberg US Financial Conditions Index .75 -18.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .69 -13.0 basis points
  • US Yield Curve -19.0 basis points (2s/10s) -5.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +2.61% -12.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.6% +1.3 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.39% unch.: CPI YoY +3.01% unch.
  • 10-Year TIPS Spread 2.27 -1.0 basis point
  • Highest target rate probability for Sept. 18th FOMC meeting: 89.6%(-.4 percentage point) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 57.5%(+1.1 percentage points) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +110 open in Japan 
  • China A50 Futures: Indicating -24 open in China
  • DAX Futures: Indicating +103 open in Germany
Portfolio:
  • Higher:  On gains in my industrial/consumer discretionary/financial/biotech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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