Tuesday, June 03, 2025

Stocks Higher into Final Hour on US-Global Trade Deal Hopes, US Economic Data, Earnings Outlook Optimism, Tech/Energy 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) 17.9 -2.3%
  • S&P 500 Intraday % Swing .65 -50.0%
  • Bloomberg Global Risk On/Risk Off Index 69.9 +2.5% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.73 -1.0%
  • Euro/Yen Carry Return Index 184.0 +.25%
  • Emerging Markets Currency Volatility(VXY) 8.32 -.48%
  • CBOE S&P 500 Implied Correlation Index 21.3 -3.0% 
  • ISE Sentiment Index 154.0 +5.0
  • Total Put/Call .98 +18.0%
  • NYSE Arms 1.13 +16.5%
  • NYSE Non-Block Money Flow -$.7M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.0 -.5%
  • US Energy High-Yield OAS 400.1 -3.1%
  • Bloomberg TRACE # Distressed Bonds Traded 238.0 +13.0
  • European Financial Sector CDS Index 60.9 -1.3%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 143.0 -1.2%
  • Italian/German 10Y Yld Spread 97.0 basis points -1.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 78.4 -1.2%
  • Emerging Market CDS Index 167.3 -1.3%
  • Israel Sovereign CDS 97.2 +.3%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.77 +.15%
  • 2-Year SOFR Swap Spread -22.0 basis points -.25 basis point
  • 3M T-Bill Treasury Repo Spread -.25 basis point -1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.25 -.5 basis point
  • MBS  5/10 Treasury Spread 155.0 -1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 618.0 unch.
  • Avg. Auto ABS OAS 59.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.0 +.15% 
  • US 10-Year T-Note Yield 4.46% +2.0 basis points
  • 3-Month T-Bill Yield 4.32% -2.0 basis points
  • China Iron Ore Spot 95.6 USD/Metric Tonne +1.3%
  • Dutch TTF Nat Gas(European benchmark) 35.8 euros/megawatt-hour +2.4%
  • Citi US Economic Surprise Index 2.0 -3.2 points
  • Citi Eurozone Economic Surprise Index 15.7 -3.2 points
  • Citi Emerging Markets Economic Surprise Index 32.7 -4.4 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(492 of 500 reporting) +12.5% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 276.75 -.09:  Growth Rate +8.9% -.1 percentage point, P/E 21.6 +.3
  • S&P 500 Current Year Estimated Profit Margin 13.26% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +32.5% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 428.40 -.04: Growth Rate +23.9% unch., P/E 32.8 +.4
  • Bloomberg US Financial Conditions Index .36 +2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.32 -9.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 7.6 -.2
  • US Yield Curve 50.0 basis points (2s/10s) -1.5 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +4.6% +80.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.6% -20.0 basis points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.65% unch.: CPI YoY +2.40% unch.
  • 1-Year TIPS Spread 2.86 +2.0 basis points
  • 10-Year TIPS Spread 2.34 unch.
  • Highest target rate probability for July 30th FOMC meeting: 74.3% (unch.) chance of 4.25%-4.5%. Highest target rate probability for Sept. 17th meeting: 54.1%(-1.6 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +330 open in Japan 
  • China A50 Futures: Indicating -90 open in China
  • DAX Futures: Indicating +70 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/tech/utility/financial/industrial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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