Monday, July 17, 2023

Stocks Rising into Afternoon on Earnings Outlook Optimism, Stable Long-Term Rates, Short-Covering, Alt Energy/Technology Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 13.6 +1.7%
  • DJIA Intraday % Swing .53%
  • Bloomberg Global Risk On/Risk Off Index 65.0 -.8%
  • Euro/Yen Carry Return Index 164.5 +.07%
  • Emerging Markets Currency Volatility(VXY) 8.4 +1.45%
  • CBOE S&P 500 Implied Correlation Index 16.5 -.5% 
  • ISE Sentiment Index 132.0 +16.0 points
  • Total Put/Call .75 -11.8%
  • NYSE Arms 1.28 -22.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 66.7 +.43%
  • US Energy High-Yield OAS 353.80 +1.44%
  • Bloomberg TRACE # Distressed Bonds Traded 390.0 -6.0
  • European Financial Sector CDS Index 82.0 +1.1% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 266.8 +1.1%
  • Italian/German 10Y Yld Spread 167.0 basis points +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 111.0 +.03%
  • Emerging Market CDS Index 204.70 -.36%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.9 -.33%
  • 2-Year Swap Spread 21.75 basis points unch.
  • TED Spread 21.75 basis points +1.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -12.75 -1.5 basis points
  • MBS  5/10 Treasury Spread 162.0 +6.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 715.0 -3.0 basis points
  • Avg. Auto ABS OAS 78.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 43.8 -.26%
  • 3-Month T-Bill Yield 5.38% unch.
  • China Iron Ore Spot 112.9 USD/Metric Tonne +.4%
  • Dutch TTF Nat Gas(European benchmark) 25.1 euros/megawatt-hour  -3.3%
  • Citi US Economic Surprise Index 74.8 +7.0 points
  • Citi Eurozone Economic Surprise Index -129.5 +6.4 points
  • Citi Emerging Markets Economic Surprise Index -10.2 -10.0 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(28 of 500 reporting) +12.7% +19.7 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.33 +.10:  Growth Rate +3.5% +.1 percentage point, P/E 19.5 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.17% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 216.87 +.63: Growth Rate +42.5% +.4 percentage point, P/E 37.2 +.3
  • Bloomberg US Financial Conditions Index .41 +1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index -4.22 -10.0 basis points
  • US Yield Curve -93.5 basis points (2s/10s) -4.75 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +2.29% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.19% unch.: CPI YoY +3.35% unch.
  • 10-Year TIPS Spread 2.26 +1.0 basis point
  • Highest target rate probability for Sept. 20th FOMC meeting: 84.1%(+.5 percentage point) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 68.2%(-.6 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -27 open in Japan 
  • China A50 Futures: Indicating -46 open in China
  • DAX Futures: Indicating +124 open in Germany
Portfolio:
  • Higher:  On gains in my tech/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (BAC)/.84
  • (BK)/1.22
  • (SCHW)/.71
  • (HAS)/.56
  • (LMT)/6.45
  • (MS)/1.20
  • (NVS)/-.20
  • (PNC)/3.29
  • (PLD)/1.67
After the Close: 
  • (AIR)/.78
  • (IBKR)/1.40
  • (JBHT)/1.90
  • (OMC)/1.80
  • (PNFP)/1.63
  • (WAL)/1.97
Economic Releases  

8:30 am EST

  • Retail Sales Advance MoM for June is estimated to rise +.5% versus a +.3% gain in May.
  • Retail Sales Ex Autos MoM for June is estimated to rise +.4% versus a +.1% gain in May.
  • Retail Sales Ex Autos and Gas for June is estimated to rise +.4% versus a +.4% gain in May.
  • NY Fed Services Business Activity for July.

9:15 am EST

  • Industrial Production MoM for June is estimated unch. versus a -.2% decline in May.
  • Capacity Utilization for June is estimated to fall to 79.5% versus 79.6% in May.
  • Manufacturing Production for June is estimated unch. versus a +.1% gain in May.

10:00 am EST

  • Business Inventories for May is estimated to rise +.2% versus a +.2% gain in April.
  • The NAHB Housing Market Index for July is estimated to rise to 56.0 versus 55.0 in June.

4:00 pm EST

  • Net Long-Term TIC Flows for May.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The RBA Minutes, weekly US retail sales reports and the (SCHW) business update could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

  • NYSE Volume Running -11.2% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 10.0 -1.7
  • 6 Sectors Declining, 5 Sectors Rising
  • 56.6% of Issues Advancing, 40.6% Declining
  • 91 New 52-Week Highs, 16 New Lows
  • 56.9%(+2.2%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 64.0 unch.
  • Bloomberg Global Risk-On/Risk-Off Index 65.2 -.4%
  • Russell 1000: Growth/Value 17,733.8 +.41%
  • 1-Day Vix 7.7 -24.1%
  • Vix 13.5 +1.1% 
  • Total Put/Call .71 -16.5%
  • TRIN/Arms 1.25 -23.6%

Sunday, July 16, 2023

Monday Watch

Today's Headlines

Bloomberg: Zero Hedge:
Barron's:
  • Had bullish commentary on (TOST), (FYBR) and (BIIB).
NewsMax:
Fox News:
TheGatewayPundit.com:
The Epoch Times:
Twitter:
OpenVAERS:
SKirsch.com:
Night Trading
  • Asian indices are -.5% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 111.25 +.25 basis point.
  • China Sovereign CDS 61.5 +.25 basis point.
  • China Iron Ore Spot 112.5 USD/Metric Tonne -1.5%.
  • Bloomberg Emerging Markets Currency Index 43.9 -.05%.
  • Bloomberg Global Risk-On/Risk Off Index 65.3 -.18%.
  • Bloomberg US Financial Conditions Index .40 unch. 
  • Volatility Index(VIX) futures 15.7 -.21%. 
  • Euro Stoxx 50 futures -.47%.
  • S&P 500 futures -.07%.
  • NASDAQ 100 futures -.06%.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the week.

Friday, July 14, 2023

Evening Headlines

Bloomberg:

Zero Hedge:
CNBC:
TheGatewayPundit.com:
The Epoch Times:
OpenVAERS:
SKirsch.com: