Friday, June 23, 2023

Evening Headlines

Bloomberg:

Zero Hedge:
TheGatewayPundit.com:
OpenVAERS:
SKirsch.com:

Stocks Finish Lower on US Policy-Induced Stagflation Fears, Global Growth Worries, Dollar Strength, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Almost Every Sector Declining
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 13.2 +2.5%
  • DJIA Intraday % Swing .56%
  • Bloomberg Global Risk On/Risk Off Index 61.7 -2.9%
  • Euro/Yen Carry Return Index 164.7 -.11%
  • Emerging Markets Currency Volatility(VXY) 8.7 +.35%
  • CBOE S&P 500 Implied Correlation Index 19.8 +1.9% 
  • ISE Sentiment Index 103.0 -29.0 points
  • Total Put/Call .86 +6.2%
  • NYSE Arms 1.44 +19.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 72.4 +1.8%
  • US Energy High-Yield OAS 389.18 +2.9%
  • Bloomberg TRACE # Distressed Bonds Traded 367.0 -10.0
  • European Financial Sector CDS Index 92.09 +196% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 295.97 +.56%
  • Italian/German 10Y Yld Spread 163.0 basis points -1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 116.1 +1.4%
  • Emerging Market CDS Index 222.75 +1.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.4 -.08%
  • 2-Year Swap Spread 18.75 basis points -2.0 basis points
  • TED Spread 24.75 basis points -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -15.0 +.5 basis point
  • MBS  5/10 Treasury Spread 163.0 +2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 716.0 -13.0 basis points
  • Avg. Auto ABS OAS 80.0 -3.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 44.2 -.83%
  • 3-Month T-Bill Yield 5.29% +1.0 basis point
  • China Iron Ore Spot 109.0 USD/Metric Tonne -.17%
  • Dutch TTF Nat Gas(European benchmark) 32.5 euros/megawatt-hour  -4.7%
  • Citi US Economic Surprise Index 22.5 -6.4 points
  • Citi Eurozone Economic Surprise Index -131.9 -39.7 points
  • Citi Emerging Markets Economic Surprise Index 3.2 -.7 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(8 of 500 reporting) -.8% -.2 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.37 -.01:  Growth Rate +3.5% unch., P/E 18.8 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.22% -.1 percentage point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 212.27 +.12: Growth Rate +39.5% +.1 percentage point, P/E 36.0 -.1
  • Bloomberg US Financial Conditions Index .30 -8.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -4.36 -14.0 basis points
  • US Yield Curve -101.75 basis points (2s/10s) -1.75 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +1.95% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.70% unch.: CPI YoY +3.22% unch.
  • 10-Year TIPS Spread 2.22 -2.0 basis points
  • Highest target rate probability for Sept. 20th FOMC meeting: 64.9%(+.3 percentage point) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 59.4%(-.6 percentage point) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -96 open in Japan 
  • China A50 Futures: Indicating -183 open in China
  • DAX Futures: Indicating +115 open in Germany
Portfolio:
  • Slightly Lower:  On losses in my tech/medical/industrial/utility sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Thursday, June 22, 2023

Friday Watch

Evening Headlines

Bloomberg:

Zero Hedge:
Wall Street Journal: 
Fox News:
TheGatewayPundit.com: 
Twitter: 
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are -.5% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 114.25 +.5 basis point. 
  • China Sovereign CDS 58.25 -.5 basis point.
  • China Iron Ore Spot 111.3 USD/Metric Tonne -.32%.
  • Bloomberg Emerging Markets Currency Index 44.5 -.12%.
  • Bloomberg Global Risk-On/Risk Off Index 64.7 +1.7%. 
  • Bloomberg US Financial Conditions Index .32 -6.0 basis points.
  • Volatility Index(VIX) futures 15.8 +.13%.
  • Euro Stoxx 50 futures +.02%.
  • S&P 500 futures -.06%.
  • NASDAQ 100 futures -.05%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and consumer shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 50% net long heading into the day.

Stocks Reversing Slightly Higher into Close on US Economic "Soft-Landing" Hopes, Earnings Outlook Optimism, Technical Buying, Tech/Healthcare Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.1 -.45%
  • DJIA Intraday % Swing .50%
  • Bloomberg Global Risk On/Risk Off Index 63.5 +2.2%
  • Euro/Yen Carry Return Index 164.7 +.49%
  • Emerging Markets Currency Volatility(VXY) 8.7 -.57%
  • CBOE S&P 500 Implied Correlation Index 20.1 +.7% 
  • ISE Sentiment Index 122.0 +1.0 point
  • Total Put/Call .78 -13.3%
  • NYSE Arms 1.17 -6.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 71.28 +.7%
  • US Energy High-Yield OAS 379.60 -.59%
  • Bloomberg TRACE # Distressed Bonds Traded 377.0 -2.0
  • European Financial Sector CDS Index 90.1 +.14% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 294.3 +.31%
  • Italian/German 10Y Yld Spread 164.0 basis points +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 114.5 +.6%
  • Emerging Market CDS Index 218.8 +.48%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.38 -.1%
  • 2-Year Swap Spread 18.75 basis points -2.0 basis points
  • TED Spread 25.5 basis points +2.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -15.5 +.75 basis point
  • MBS  5/10 Treasury Spread 161.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 729.0 +1.0 basis point
  • Avg. Auto ABS OAS 83.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 44.6 -1.7%
  • 3-Month T-Bill Yield 5.28% unch.
  • China Iron Ore Spot 111.1 USD/Metric Tonne -.5%
  • Dutch TTF Nat Gas(European benchmark) 34.1 euros/megawatt-hour  -7.2%
  • Citi US Economic Surprise Index 28.9 -1.3 points
  • Citi Eurozone Economic Surprise Index -92.2 -.9 point
  • Citi Emerging Markets Economic Surprise Index 3.9 -1.5 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(7 of 500 reporting) -.6% +3.3 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.38 +.14:  Growth Rate +3.5% -.2 percentage point, P/E 18.9 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.23% +.1 percentage point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 212.15 +3.08: Growth Rate +39.4% +2.0 percentage points, P/E 36.1 -.3
  • Bloomberg US Financial Conditions Index .36 +2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -4.22 -9.0 basis points
  • US Yield Curve -100.0 basis points (2s/10s) -2.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +1.95% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.70% unch.: CPI YoY +3.22% unch.
  • 10-Year TIPS Spread 2.24 +2.0 basis points
  • Highest target rate probability for Sept. 20th FOMC meeting: 67.2%(+.6 percentage point) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 60.8%(-2.5 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +256 open in Japan 
  • China A50 Futures: Indicating -71 open in China
  • DAX Futures: Indicating +15 open in Germany
Portfolio:
  • Higher:  On gains in my tech/medical sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (APOG)/.90
  • (KMX)/.79
After the Close: 
  • None of note
Economic Releases   
9:45 am EST
  • The S&P Global US Manufacturing PMI report for June is estimated to rise to 48.5 versus 48.4 in May.
  • The S&P Global US Services PMI report for June is estimated to fall to 54.0 versus 54.9 in May.
  • The S&P Global US Composite PMI for June is estimated to fall to 53.5 versus 54.3 in May.
11:00 am EST
  • The Kansas City Fed Services Activity for June.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The Fed's Bullard speaking, Fed's Bostic speaking, Fed's Mester speaking, Eurozone PMI report, Bloomberg June US Economic Survey and the (DXCM) investor day could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST