BETWEEN THE HEDGES

Tuesday, September 03, 2024

Wednesday Watch

Posted by Gary .....at 7:53 PM

Night Trading

Asian equity indices are -2.75% to -1.75% on average.

Asia Ex-Japan Investment Grade CDS Index 95.25 +1.5 basis points.

China Sovereign CDS 60.5 +2.75 basis points.
China Iron Ore Spot 94.0 USD/Metric Tonne +.4%

Bloomberg Emerging Markets Currency Index 38.8 -.04%.
Bloomberg Global Risk-On/Risk Off Index 51.9 unch.
Volatility Index(VIX) futures 20.2 +.23%.
Euro Stoxx 50 futures n/a.

S&P 500 futures -.15%.

NASDAQ 100 futures -.27%.

Morning Preview Links

BOTTOM LINE: Asian indices are lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Earnings Outlook Worries, US Economic Data, Technical Selling, Tech/Energy Sector Weakness

Posted by Gary .....at 3:37 PM

Broad Equity Market Tone:

Advance/Decline Line: Substantially Lower

Sector Performance: Almost Every Sector Declining

Volume: Around Average

Market Leading Stocks: Performing In Line

Equity Investor Angst:

Volatility(VIX) 20.2 +29.8%
DJIA Intraday % Swing 1.05 +23.1%
Bloomberg Global Risk On/Risk Off Index 52.5 -7.3%

Euro/Yen Carry Return Index 177.5 -1.1%

Emerging Markets Currency Volatility(VXY) 8.9 -.33%

CBOE S&P 500 Implied Correlation Index 20.8 +43.2%

ISE Sentiment Index 128.0 -10.0

Total Put/Call .85 -24.1%

NYSE Arms 1.21 +163.0%
NYSE Non-Block Money Flow -$455.3M

Credit Investor Angst:

North American Investment Grade CDS Index 51.7 +4.8%

US Energy High-Yield OAS 312.2 +5.4%
Bloomberg TRACE # Distressed Bonds Traded 270 +21

European Financial Sector CDS Index 62.3 +3.4%
Deutsche Bank Subordinated 5Y Credit Default Swap 166.5 +2.0%

Italian/German 10Y Yld Spread 147.0 basis points +7.0 basis points

Asia Ex-Japan Investment Grade CDS Index 94.8 +2.2%

Emerging Market CDS Index 167.2 +3.2%
Israel Sovereign CDS 130.6 +3.0%

China Corp. High-Yield Bond USD ETF(KHYB) 24.8 -.8%

2-Year SOFR Swap Spread -19.75 basis points unch.

Treasury Repo 3M T-Bill Spread -20.5 basis points +.25 basis point

3-Month EUR/USD Cross-Currency Basis Swap -1.25 -.5 basis point
MBS 5/10 Treasury Spread 136.0 unch.
Bloomberg CMBS Investment Grade Bbb Average OAS 695.0 +3.0 basis points
Avg. Auto ABS OAS 67.0 +1.0 basis point

Economic Gauges:

Bloomberg Emerging Markets Currency Index 38.9 -.19%
3-Month T-Bill Yield 5.12% +1.0 basis point

China Iron Ore Spot 93.9 USD/Metric Tonne +.3%
Dutch TTF Nat Gas(European benchmark) 37.2 euros/megawatt-hour -3.6%

Citi US Economic Surprise Index -25.1 -.9 point

Citi Eurozone Economic Surprise Index -39.5 +11.4 points

Citi Emerging Markets Economic Surprise Index -11.4 -.4 point
S&P 500 Current Quarter EPS Growth Rate YoY(493 of 500 reporting) +11.4% unch.
S&P 500 Blended Forward 12 Months Mean EPS Estimate 265.84 +.31: Growth Rate +13.8% +.1 percentage point, P/E 21.3 +.2
S&P 500 Current Year Estimated Profit Margin 12.69% unch.
NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +36.3% unch.
NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 346.40 +.65: Growth Rate +22.5% +.2 percentage point, P/E 31.2 -.6
Bloomberg US Financial Conditions Index .85 +7.0 basis points
Bloomberg Euro-Zone Financial Conditions Index .84 +10.0 basis points
US Yield Curve -3.5 basis points (2s/10s) -1.5 basis points
US Atlanta Fed 3Q GDPNow Forecast +2.04% -49.0 basis points
US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 69.1% -.3 percentage point

Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +2.56% unch.
10-Year TIPS Spread 2.12 -4.0 basis points
Highest target rate probability for Nov. 7th FOMC meeting: 44.7%(+2.9 percentage points) chance of 4.5%-4.75%. Highest target rate probability for Dec. 18th meeting: 44.6%(-.2 percentage point) chance of 4.25%-4.5%.

Overseas Futures:

Nikkei 225 Futures: Indicating -890 open in Japan
China A50 Futures: Indicating -44 open in China

DAX Futures: Indicating -36 open in Germany

Portfolio:

Lower: On losses in my industrial/tech/biotech/consumer discretionary sector longs

Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

Market Exposure: Moved to 25% Net Long

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

Posted by Gary .....at 1:21 PM

Earnings of Note
Company/Estimate

Before the Open:

(CRMT)/.66
(CIEN)/.26
(DKS)/3.86
(DLTR)/1.04
(HRL)/.36

After the Close:

(AVAV)/.62
(AI)/-.13
(CASY)/4.51
(CHPT)/-.15
(CPRT)/.36
(HPE)/.47
(VRNT)/.53

Economic Releases

8:30 am EST

The Trade Deficit for July is estimated to widen to -$79.0B versus -$73.1B in June.

10:00 am EST

The JOLTS Job Openings report for July is estimated to fall to 8100K versus 8184K in June.
Factory Orders for July is estimated to rise +4.8% versus a -3.3% decline in June.
Final Durable Goods reading for July.

2:00 pm EST

Fed Beige Book release.

Afternoon

Wards Total Vehicles Sales report for Aug. is estimated to fall to 15.4M versus 15.82M in July.

Upcoming Splits

None of note

Other Potential Market Movers

The weekly US retail sales reports, weekly MBA Mortgage Applications report, API weekly crude oil stock report, Citi TMT Conference, Morgan Stanley Healthcare Conference, Wells Fargo Healthcare Conference, Barclays Consumer Staples Conference, Goldman Retailing Conference and the Jefferies Industrials Conference could also impact global trading tomorrow.

US Equity Market Hours

9:30 am - 4:00 pm EST

Mid-Day Market Internals

Posted by Gary .....at 12:25 PM

NYSE Composite Index:

Volume Running +4.5% Above 100-Day Average
Nasdaq/NYSE Volume Ratio 11.9 -2.3
6 Sectors Declining, 5 Sectors Rising
31.5% of Issues Advancing, 66.1% Declining
TRIN/Arms 1.0 +117.3%
Non-Block Money Flow -$247.5M
166 New 52-Week Highs, 35 New Lows
58.4% (-5.3%) of Issues Above 200-day Moving Average
Average 14-Day RSI 62.0 -3.0

Other:

Bloomberg Global Risk-On/Risk-Off Index 53.5 -5.4%
Bloomberg Cyclicals/Defensives Index 223.4 -1.8%
Russell 1000: Growth/Value 19,142.1 -1.4%
CNN Fear & Greed Index 68.0 (GREED) +6.0
1-Day Vix 12.4 +9.2%
Vix 18.2 +16.7%
Total Put/Call .85 -24.1%

Monday, September 02, 2024

Tuesday Watch

Posted by Gary .....at 9:20 PM

Around X:

@elonmusk

Unless the Brazilian government returns the illegally seized property of 𝕏 and SpaceX, we will seek reciprocal seizure of government assets too. Hope Lula enjoys flying commercial. (video)

@amuse

WEAPONIZATION: Just days after @realDonaldTrump was shot, 23 Washington D.C. residents were secretly being asked by Biden's special counsel to send the former president to prison for the rest of his life. At least 12 agreed and Trump was indicted 9 days before the DoJ deadline for prosecuting someone running for public office. The Biden-Harris regime was desperate following the president's horrific debate performance and desperately needed a new indictment after SCOTUS gutted their prior efforts. (timeline)

@LauraLoomer

JUST IN: @Eagles just said @KamalaHarris is putting up counterfeit political ads to trick Eagles fans into thinking the team has endorsed @KamalaHarris. (pic)

@Rasmussen_Poll

Georgia: Joe Biden did not ‘win’ Georgia in 2020.

@HealthRanger

We are now watching one of the most hilarious political pivots in history, where Democrats, reacting to the exploding #MAHA movement (Make America Healthy Again) with RFK + Trump, are now openly siding with processed foods, junk foods, pesticides, GMOs, toxic food ingredients and of course Big Pharma's deadly vaccines.
In Colorado, they do NOTHING when armed migrant gangs take over entire apartment building complexes in Aurora, but when some creative person posts a sign meme protesting the insanity, a MANHUNT is under way! No doubt the entire FBI, SWAT, DOJ, military and Space Force will be hunting down whoever posted these signs! (video)

@stkirsch

This is huge. The first of five states to go after Pfizer for-misrepresentation. (video)

@catturd2

That’s really all you need to know. (pic)

@DC_Draino

They don’t finish counting on election night for 1 reason. To figure out how many votes they need to cheat, then slowly commingle those fake ballots in with the real ones. We know they do this. Question now is, can we stop them this time? Poll watchers must refuse to leave at any cost. Make them DRAG you out b/c that is when they are going to cheat the most. And when you see them cheating, get video of it and call the RNC legal hotline to get immediate injunctions filed. NO GOING HOME
Whoa - a whistleblower in the Aurora, CO police department is revealing that the Venezuelan gangs aren’t just terrorizing a single apartment complex. It’s happening across the city. (pic)

@wideawake_media

"Farming needs to stop. That's the single biggest driver of climate change." Do you think these kids even know where the food in the supermarkets comes from? (video)

@TonyClimate

Climategate emails show that erasure of the prior warmth was coordinated by #ClimateScam professionals in several countries. (pic)

@WallStreetSilv

Is the system broken? (pic)
Did You Know? (pic)

@WallStreetApes

Andy Frisella Believes Kamala Harris Has Worse Poll Ratings Now Than She Did 4 Months Ago (Which was 27%). (video)