Sunday, August 30, 2020

Weekly Outlook

BOTTOM LINE: I expect US stocks to finish the week mixed as global recession fears, rising China tensions and profit-taking offset coronavirus vaccine/treatment optimism, falling Biden Presidency odds and global stimulus hopes. My intermediate-term trading indicators are giving bearish signals and the Portfolio is 50% net long heading into the week.

Saturday, August 29, 2020

Today's Headlines

Bloomberg:      
Wall Street Journal:
CNBC:
  • Had bullish commentary on (TOL),(TMHC), (MCD) and (SBUX).
MarketWatch.com:   
Fox News:
Zero Hedge:    

Friday, August 28, 2020

Stocks Higher into Final Hour on Trump Speech, Global Central Bank Hopes, Technical Buying, Gaming/Airline Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 23.8 -2.7%
  • Bloomberg Global Risk On/Risk Off Index 555.0 +77.0 points
  • Euro/Yen Carry Return Index 129.86 -.53%
  • Emerging Markets Currency Volatility(VXY) 11.03 -.63%
  • S&P 500 Implied Correlation 37.4 -1.7%
  • ISE Sentiment Index 124.0 +22.0 points
  • Total Put/Call .66 +6.5%
  • NYSE Arms .66 -22.2%
Credit Investor Angst:
  • North American Investment Grade CDS Index 67.12 -.63%
  • US Energy High-Yield OAS 760.65 +.25%
  • European Financial Sector CDS Index 61.30 +1.66%
  • Italian/German 10Y Yld Spread 143.5 +.25 basis point
  • Asia Ex-Japan Investment Grade CDS Index  62.07 -.08%
  • Emerging Market CDS Index 175.25 -2.9%
  • iBoxx Offshore RMB China Corporate High Yield Index 177.58 +.04%
  • 2-Year Swap Spread 9.0 +.25 basis point
  • TED Spread 16.0 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -1.0 basis point
  • MBS  5/10 Treasury Spread  93.5 +3.25 basis points
  • IHS Markit CMBX BBB- 6 68.25 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 60.83 +1.12%
  • 3-Month T-Bill Yield .10% unch.
  • Yield Curve 61.5 +8.5 basis points
  • China Iron Ore Spot 119.70 USD/Metric Tonne +2.1%
  • Citi US Economic Surprise Index 242.50 -.3 point
  • Citi Eurozone Economic Surprise Index 151.9 +5.9 points
  • Citi Emerging Markets Economic Surprise Index 25.0 +.4 point
  • 10-Year TIPS Spread 1.77 +3.0 basis points
  • 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -12 open in Japan 
  • China A50 Futures: Indicating -58 open in China
  • DAX Futures: Indicating -7 open in Germany
Portfolio:
  • Slightly Higher: On gains in my industrial/consumer staple/tech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

 

Morning Market Internals

NYSE Composite Index:

Thursday, August 27, 2020

Friday Watch

Night Trading 
  • Asian equity indices are -.25%  to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 62.75 +.5 basis point.
  • China Sovereign CDS 35.75 unch.
  • Bloomberg Emerging Markets Currency Index 60.16 +.01%.
  • Bloomberg Global Risk-On/Risk Off Index 465.0 -12.0 points
  • Volatility Index(VIX) futures 26.9 -.46%
  • FTSE 100 futures +.17%.
  • S&P 500 futures +.20%.
  • NASDAQ 100 futures +.14%.
Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:
  • (BIG)/2.70
  • (HIBB)/1.15
After the Close:
  • None of note
Economic Releases
8:30 am EST
  • Advance Goods Trade Balance report for July is estimated to widen to -$72.0B versus -$70.6B in June.
  • Wholesale Inventories MoM for July is estimated to fall -.9% versus a -1.4% decline in June.
  • Retail Inventories MoM for July is estimated to fall -1.1% versus a -2.6% decline in June.
  • Personal Income for July is estimated to fall -.4% versus a -1.1% decline in June.
  • Personal Spending for July is estimated to rise +1.5% versus a +5.6% gain in June.
  • The PCE Core MoM for July is estimated to rise +.5% versus a +.2% gain in June.
9:45 am EST
  • The MNI Chicago PMI for August is estimated to rise to 52.6 versus 51.9 in July.
Upcoming Splits
  • (AAPL)/4-for-1
  • (TSLA)/5-for-1
Other Potential Market Movers
  • The Fed's Bullard speaking, Fed's Harker speaking, Fed's Mester speaking and the GFK Consumer Confidence Index could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Higher into Afternoon on Central Bank Hopes, Diminishing Coronavirus Fears, Technical Buying, Financial/Transport 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) 24.4 +4.9%
  • Bloomberg Global Risk On/Risk Off Index 568.0 -45.0 points
  • Euro/Yen Carry Return Index 130.63 +.54%
  • Emerging Markets Currency Volatility(VXY) 11.13 -.45%
  • S&P 500 Implied Correlation 38.48 +1.29%
  • ISE Sentiment Index 102.0 -28.0 points
  • Total Put/Call .61 -6.15%
  • NYSE Arms .83 -23.2%
Credit Investor Angst:
  • North American Investment Grade CDS Index 67.28 +.94%
  • US Energy High-Yield OAS 761.09 -.61%
  • European Financial Sector CDS Index 60.30 -1.69%
  • Italian/German 10Y Yld Spread 143.25 -1.75 basis points
  • Asia Ex-Japan Investment Grade CDS Index  62.29 +.37%
  • Emerging Market CDS Index 181.22 +.98%
  • iBoxx Offshore RMB China Corporate High Yield Index 177.51 +.01%
  • 2-Year Swap Spread 8.75 +.75 basis point
  • TED Spread 16.0 +2.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -1.5 basis points
  • MBS  5/10 Treasury Spread  90.25 unch.
  • IHS Markit CMBX BBB- 6 68.25 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 60.18 +.15%
  • 3-Month T-Bill Yield .10% unch.
  • Yield Curve 53.0 -2.0 basis points
  • China Iron Ore Spot 118.0 USD/Metric Tonne -1.20%
  • Citi US Economic Surprise Index 242.80 +4.7 points
  • Citi Eurozone Economic Surprise Index 146.0 +2.3 points
  • Citi Emerging Markets Economic Surprise Index 24.6 -.3 point
  • 10-Year TIPS Spread 1.74 +1.0 basis point
  • 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +12 open in Japan 
  • China A50 Futures: Indicating -26 open in China
  • DAX Futures: Indicating -25 open in Germany
Portfolio:
  • Higher: On gains in my medical/industrial/consumer staple/biotech sector longs and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long