Thursday, July 28, 2022

Stocks Finish at Session Highs on Lower Long-Term Rates, Less Hawkish Fed Hopes, Less European/Emerging Markets/US High-Yield Debt Angst, Alt Energy/Utility Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance:  Most Sectors Rising
  • Volume:  Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 22.6 -2.8%
  • DJIA Intraday % Swing 1.95% +294.0%
  • Bloomberg Global Risk On/Risk Off Index 3,477.0 -253.0 points
  • Euro/Yen Carry Return Index 140.82 -1.8%
  • Emerging Markets Currency Volatility(VXY) 12.0 -.6%
  • CBOE S&P 500 Implied Correlation Index 43.2 -2.7% 
  • ISE Sentiment Index 93.0 -1.0 point
  • Total Put/Call .92 -9.8%
  • NYSE Arms 1.19 +36.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 81.78 -2.7%
  • US Energy High-Yield OAS 479.04 -1.4%
  • Bloomberg TRACE # Distressed Bonds Traded 484.0 -13.0
  • European Financial Sector CDS Index 114.74 -4.7%
  • Italian/German 10Y Yld Spread 235.0 basis points -3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 149.22 -4.33%
  • Emerging Market CDS Index 337.98 -4.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.60 +.25%
  • Ukraine Sovereign Debt Credit Default Swap 11,938.0 -3.9%
  • 2-Year Swap Spread 26.25 basis points +1.25 basis points
  • TED Spread 44.5 basis points +14.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.0 basis points +1.5 basis points
  • MBS  5/10 Treasury Spread  120.0 -16.0 basis points
  • iShares CMBS ETF 48.94 +.82%
  • Avg. Auto ABS OAS .96 -2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 49.0 +.20%
  • 3-Month T-Bill Yield 2.35% -5.0 basis points
  • Yield Curve -20.25 basis points (2s/10s) +5.25 basis points
  • China Iron Ore Spot 118.25 USD/Metric Tonne +3.1%
  • Citi US Economic Surprise Index -66.40 -12.9 points
  • Citi Eurozone Economic Surprise Index -105.0 -10.3 points
  • Citi Emerging Markets Economic Surprise Index 22.6 +.6 point
  • 10-Year TIPS Spread 2.49 +8.0 basis points
  • Highest target rate probability for November 2nd FOMC meeting: 73.7%(+23.5 percentage points) chance of 3.0%-3.25%. Highest target rate probability for December 14th meeting: 46.2%(+2.0 percentage points) chance of 3.25%-3.5%.
US Covid-19:
  • 280 new infections/100K people(last 7 days total). 16.1%(+1.4 percentage points) of 1/14/22 peak(1,740) +7/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -70.5%(-.7 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +69 open in Japan 
  • China A50 Futures: Indicating -28 open in China
  • DAX Futures: Indicating -7 open in Germany
Portfolio:
  • Higher:  On gains in my medical/commodity/industrial/tech/utility sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 75% net long

Morning Market Internals

NYSE Composite Index:

  • Volume Running +1.6% Above 100-Day Average 
  • 4 Sectors Declining, 7 Sectors Rising
  • 58.8% of Issues Advancing, 37.1% Declining
  • 32 New 52-Week Highs, 28 New Lows
  • 22.0% of Issues Above 200-day Moving Average
  • Average 14-Day RSI 46.4% 
  • Bloomberg Global Risk-On/Risk-Off Index 3,404.0 -338.0 points
  • Russell 1000: Growth/Value 15,702.0 +.59%
  • Vix 22.7 -2.3%
  • Total Put/Call .98 -3.9%
  • TRIN/Arms 1.28 +45.5%

Wednesday, July 27, 2022

Thursday Watch

Evening Headlines

Bloomberg:          
Wall Street Journal:    
Fox News:
CNBC.com:
MarketWatch:             
Zero Hedge:
Newsmax:
TheGatewayPundit.com: 
The Epoch Times:
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are +.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 156.5 +4.0 basis points. 
  • China Sovereign CDS 81.25 -2.0 basis points.
  • Bloomberg Emerging Markets Currency Index 48.92 +.02%.  
  • Bloomberg Global Risk-On/Risk Off Index 3,734.0 -9.0 points.
  • Volatility Index(VIX) futures 25.0 unch.
  • Euro Stoxx 50 futures n/a.
  • S&P 500 futures -.12%.
  • NASDAQ 100 futures -.31%. 
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (AGCO)/2.11
  • (MO)/1.25
  • (AMT)/2.46
  • (BUD)/.75
  • (MT)/4.30
  • (ARCH)/21.79
  • (BAX)/.87
  • (BC)/2.70
  • (CP)/.94
  • (CMCSA)/.92
  • (FCN)/1.67
  • (HOG)/1.05
  • (HSY)/1.68
  • (HTZ)/1.20
  • (HON)/2.03
  • (IP)/1.08
  • (KDP)/.39
  • (LH)/4.68
  • (MA)/2.36
  • (MRK)/1.70
  • (NOC)/6.10
  • (BTU)/3.10
  • (PFE)/1.78
  • (PBI)/.03
  • (RS)/9.01
  • (RCL)/-2.30
  • (SAH)/2.55
  • (SO)/.84
  • (LUV)/1.18
  • (SWK)/2.13
  • (TROW)/2.15
  • (VLO)/9.19
  • (WING)/.36
After the Close:
  • (AMZN)/.12
  • (AAPL)/1.15
  • (BZH)/1.42
  • (DECK)/1.24
  • (EIX)/.90
  • (EW)/.64
  • (FSLR)/-.13
  • (INTC)/.70
  • (KLAC)/5.49
  • (LHX)/3.18
  • (MHK)/4.29
  • (OLN)/2.53
  • (ROKU)/-.68
  • (SKYW)/.44
  • (X)/3.86
  • (VFC)/.14
  • (YUMC)/.01
  • (ZEN)/.12
Economic Releases
8:30 am EST:
  • 2Q GDP is estimated to rise +.4% versus a -1.6% decline in 1Q.
  • 2Q Personal Consumption is estimated to rise +1.2% versus a +1.8% gain in 1Q.
  • 2Q GDP Price Index is estimated to rise +8.0% versus a +8.2% gain in 1Q.
  • 2Q Core PCE QoQ is estimated to rise +4.4% versus a +5.2% gain in 1Q.
  • Initial Jobless Claims for last week is estimated to fall to 250K versus 251K the prior week.
  • Continuing Claims is estimated to rise to 1386K versus 1384K prior.
11:00 am EST
  • The Kansas City Fed Manufacturing Activity Index for July is estimated to fall to 4.0 versus 12.0 in June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German retail sales, Japan Industrial Production, 7Y T-Note auction, weekly EIA natural gas inventory report and the (SCHW) business update could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Surging into Final Hour on Less Hawkish FOMC Commentary, US Dollar Weakness, Less European/Emerging Markets/US High-Yield Debt Angst, Tech/Gambling Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance:  Most Sectors Rising
  • Volume:  Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 23.6 -4.4%
  • DJIA Intraday % Swing .49% -16.9%
  • Bloomberg Global Risk On/Risk Off Index 3,700.0 +6.0 points
  • Euro/Yen Carry Return Index 143.2 +.47%
  • Emerging Markets Currency Volatility(VXY) 12.1 +1.0%
  • CBOE S&P 500 Implied Correlation Index 43.6 +3.7% 
  • ISE Sentiment Index 89.0 -11.0 points
  • Total Put/Call .98 -1.0%
  • NYSE Arms .99 -25.6%
Credit Investor Angst:
  • North American Investment Grade CDS Index 83.60 -4.1%
  • US Energy High-Yield OAS 489.93 -.45%
  • Bloomberg TRACE # Distressed Bonds Traded 497.0 +28.0
  • European Financial Sector CDS Index 120.42 -3.6%
  • Italian/German 10Y Yld Spread 238.0 basis points +6.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 156.32 +3.6%
  • Emerging Market CDS Index 356.74 -3.6%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.58 +.36%
  • Ukraine Sovereign Debt Credit Default Swap 12,427.0 +2.4%
  • 2-Year Swap Spread 25.0 basis points +1.25 basis points
  • TED Spread 30.0 basis points +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -21.5 basis points +1.75 basis points
  • MBS  5/10 Treasury Spread  136.0 -1.0 basis point
  • iShares CMBS ETF 48.56 +.10%
  • Avg. Auto ABS OAS .98 +2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 48.89 +.27%
  • 3-Month T-Bill Yield 2.40% -4.0 basis points
  • Yield Curve -25.5 basis points (2s/10s) +.75 basis point
  • China Iron Ore Spot 113.4 USD/Metric Tonne +1.7%
  • Citi US Economic Surprise Index -53.50 +4.8 points
  • Citi Eurozone Economic Surprise Index -94.70 -.2 point
  • Citi Emerging Markets Economic Surprise Index 22.0 +.1 point
  • 10-Year TIPS Spread 2.41 +5.0 basis points
  • Highest target rate probability for November 2nd FOMC meeting: 50.7%(+13.4 percentage points) chance of 3.0%-3.25%. Highest target rate probability for December 14th meeting: 45.5%(+4.9 percentage points) chance of 3.25%-3.5%.
US Covid-19:
  • 273 new infections/100K people(last 7 days total). 15.7%(+.0 percentage point) of 1/14/22 peak(1,740) +0/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -69.8%(+.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +260 open in Japan 
  • China A50 Futures: Indicating +63 open in China
  • DAX Futures: Indicating +23 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my medical/commodity/industrial/tech sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and emerging market shorts
  • Market Exposure:  Moved to 75% net long

Bear Radar

Style Underperformer:

  • Large-Cap Value +.5%
Sector Underperformers:
  • 1) Homebuilding -1.1% 2) Foods -1.1% 3) Healthcare Providers -.6%
Stocks Falling on Unusual Volume: 
  • SHOO, TRU, RPD, ASH, HUM, ROL, BG, QLYS, HA, AXTA, KHC, TDY, NXGN, SHW, ZWS, TENB, TPB and SAVA
Stocks With Unusual Put Option Activity:
  • 1) MFA 2) CMG 3) GOOG 4) OSTK 5) Z
Stocks With Most Negative News Mentions:
  • 1) FXLV 2) SAVA 3) GRMN 4) SHW 5) AGYS
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Growth +2.2%
Sector Outperformers:
  • 1) Software +3.6% 2) Internet +3.5% 3) Alt Energy +2.8%
Stocks Rising on Unusual Volume:
  • ENPH, MANH, CMG, CSGP, PYPL, ROK, LEGN, CLAR, TSE and BOKF
Stocks With Unusual Call Option Activity:
  • 1) HR 2) COMM 3) CMG 4) SAVA 5) SKX
Stocks With Most Positive News Mentions:
  • 1) ENPH 2) PZN 3) HLX 4) BSX 5) NYCB