Tuesday, September 03, 2024

Wednesday Watch

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

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

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

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

Around X:

  • @elonmusk
  • @amuse
  • @LauraLoomer
  • @Rasmussen_Poll
  • @HealthRanger
  • @stkirsch
  • @catturd2
  • @DC_Draino
  • @wideawake_media
  • @WallStreetSilv
Night Trading
  • Asian indices are unch. to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 93.75 +1.75 basis points.
  • China Sovereign CDS 57.75 +.25 basis point.
  • China Iron Ore Spot 97.2 USD/Metric Tonne +.4%.
  • Bloomberg Emerging Markets Currency Index 38.9 -.06%.
  • Bloomberg Global Risk-On/Risk Off Index 58.4 +3.4%.
  • Volatility Index(VIX) futures 17.4 +.05%. 
  • Euro Stoxx 50 futures -.06%.
  • S&P 500 futures -.07%.
  • NASDAQ 100 futures -.22%.

BOTTOM LINE: Asian indices are slightly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the week.

Friday, August 30, 2024

Stocks Rising into Final Hour on Earnings Outlook Optimism, US Economic Data, Technical Buying, Tech/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Around Even
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 15.1 -3.6%
  • DJIA Intraday % Swing .80 -32.7%
  • Bloomberg Global Risk On/Risk Off Index 57.1 +2.5%
  • Euro/Yen Carry Return Index 178.2 +.6%
  • Emerging Markets Currency Volatility(VXY) 9.0 -.11%
  • CBOE S&P 500 Implied Correlation Index 14.2 -3.5% 
  • ISE Sentiment Index 140.0 -2.0
  • Total Put/Call .71 -23.7%
  • NYSE Arms .82 -24.8%
  • NYSE Non-Block Money Flow -$125.2M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 49.6 -.07%
  • US Energy High-Yield OAS 294.53 -.11%
  • Bloomberg TRACE # Distressed Bonds Traded 249 -5
  • European Financial Sector CDS Index 60.41 +1.1%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 162.75 +.92%
  • Italian/German 10Y Yld Spread 140.0 basis points +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 91.4 -.94%
  • Emerging Market CDS Index 162.0 +.6%
  • Israel Sovereign CDS 127.2 -.33%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.1 unch.
  • 2-Year SOFR Swap Spread -19.75 basis points -.25 basis point
  • Treasury Repo 3M T-Bill Spread -20.75 basis points +2.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -.75 -.25 basis point
  • MBS  5/10 Treasury Spread 136.0 +2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 692.0 -3.0 basis points
  • Avg. Auto ABS OAS 66.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 38.9 -.06%
  • 3-Month T-Bill Yield 5.11% unch.
  • China Iron Ore Spot 100.8 USD/Metric Tonne -.23%
  • Dutch TTF Nat Gas(European benchmark) 39.82 euros/megawatt-hour +2.49%
  • Citi US Economic Surprise Index -24.2 +.6 point
  • Citi Eurozone Economic Surprise Index -50.9 -.7 point
  • 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 265.53 +.33:  Growth Rate +13.7% +.2 percentage point, P/E 21.1 -.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 345.75 +.99: Growth Rate +22.3% +.3 percentage point, P/E 31.8 -.5
  • Bloomberg US Financial Conditions Index .78 +1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index .74 -6.0 basis points
  • US Yield Curve -2.0 basis points (2s/10s) +1.0 basis point
  • US Atlanta Fed 3Q GDPNow Forecast +2.53% +54.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 69.4% -1.6 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% +10.0 basis points: CPI YoY +2.56% unch.
  • 10-Year TIPS Spread 2.16 unch.
  • Highest target rate probability for Nov. 7th FOMC meeting: 50.3%(+4.3 percentage points) chance of 4.75%-5.0%. Highest target rate probability for Dec. 18th meeting: 44.8%(+.1 percentage point) chance of 4.25%-4.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +336 open in Japan 
  • China A50 Futures: Indicating -59 open in China
  • DAX Futures: Indicating +70 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial/tech/utility sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long