Tuesday, April 29, 2025

Stocks Reversing Higher into Final Hour on US Global Trade Deal Hopes, Lower Long-Term Rates, Earnings Outlook Optimism, Pharma/Transport 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) 23.9 -4.9%
  • S&P 500 Intraday % Swing .83 -46.4%
  • Bloomberg Global Risk On/Risk Off Index 60.8 +2.2% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.82 -.75%
  • Euro/Yen Carry Return Index 181.8 -.12%
  • Emerging Markets Currency Volatility(VXY) 8.6 -.2%
  • CBOE S&P 500 Implied Correlation Index 33.5 -3.0% 
  • ISE Sentiment Index 127.0 +2.0
  • Total Put/Call .91 +7.1%
  • NYSE Arms 1.36 +58.1%
  • NYSE Non-Block Money Flow -$206.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 67.0 -.4%
  • US Energy High-Yield OAS 466.2 +2.8%
  • Bloomberg TRACE # Distressed Bonds Traded 275.0 +18.0
  • European Financial Sector CDS Index 71.1 +.9%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 160.0 -3.0%
  • Italian/German 10Y Yld Spread 111.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 94.6 +.8%
  • Emerging Market CDS Index 195.2 -.2%
  • Israel Sovereign CDS 102.4 +1.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.7 -.16%
  • 2-Year SOFR Swap Spread -24.0 basis points -.75 basis point
  • 3M T-Bill Treasury Repo Spread -6.5 basis point -3.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.75 +.25 basis point
  • MBS  5/10 Treasury Spread 158.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 639.0 -1.0 basis point
  • Avg. Auto ABS OAS 77.0 -3.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.99 +.06% 
  • US 10-Year T-Note Yield 4.17% -3.0 basis points
  • 3-Month T-Bill Yield 4.28% -1.0 basis point
  • China Iron Ore Spot 98.4 USD/Metric Tonne -.06%
  • Dutch TTF Nat Gas(European benchmark) 31.9 euros/megawatt-hour -1.7%
  • Citi US Economic Surprise Index -6.2 -7.0 points
  • Citi Eurozone Economic Surprise Index -19.3 -7.1 points
  • Citi Emerging Markets Economic Surprise Index 13.5 +.2 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(216 of 500 reporting) +15.1% -2.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.67 -.09:  Growth Rate +12.2% unch., P/E 20.1 +.2
  • S&P 500 Current Year Estimated Profit Margin 13.40% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +43.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 421.39 +.44: Growth Rate +21.9% +.2 percentage point, P/E 29.2 +.3
  • Bloomberg US Financial Conditions Index -.24 -3.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .98 +1.0 basis point
  • Bloomberg Global Trade Policy Uncertainty Index 10.7 +.1
  • US Yield Curve 51.5 basis points (2s/10s) -1.0 basis point
  • US Atlanta Fed GDPNow Q1 Forecast -2.7% -20.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 45.8% +2.5 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% unch.: CPI YoY +2.35% unch.
  • 1-Year TIPS Spread 3.21 -5.0 basis points
  • 10-Year TIPS Spread 2.23 -3.0 basis points
  • Highest target rate probability for June 18th FOMC meeting: 57.2% (unch.) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 49.3%(+3.0 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +370 open in Japan 
  • China A50 Futures: Indicating -21 open in China
  • DAX Futures: Indicating +210 open in Germany
Portfolio:
  • Higher: On gains in my utility/tech/industrial/consumer discretionary sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges 
  • Market Exposure: Moved to 100% Net Long

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