-0.18%
-0.33%Here’s my take on the markets today, April 25th, 2013. If you’d like to read more of my articles, click here.
Credit gauges are mostly deteriorating today. The North America Investment Grade CDS Index is down -2.7% to 77.82 bps. The Japan sovereign cds is down -2.0% to 66.27 bps. The South Korea sovereign cds is down -2.7% to 72.0 bps. The Brazil sovereign cds is down -1.4% to 115.25 bps. However, the The FRA-OIS Spread is gaining +2.8% to 18.75 bps. The TED Spread is rising +2.3% to 23.0 bps. The 3M EUR/USD Cross-Currency Basis Swap is falling -1.9% to -17.9 bps. The US sovereign cds is up +3.0% to 34.0 bps. The European Financial Sector CDS Index is gaining +1.2% to 159.80 bps. The Germany sovereign cds is rising +1.3% to 34.62 bps. The Spain sovereign cds is up +1.0% to 252.45 bps. The Italian/German 10Y Yld Spread is up +1.9% to 281.97 bps. The Emerging Markets CDS Index is up +.9% to 238.02 bps. Overall, gauges have improved this week, but remain at stressed levels.
Major Asian indices were mostly higher overnight, led by a +1.2% gain in India. However, China fell -.9% and still trades poorly. Major European indices were mostly higher today, boosted by a +.95% gain in Germany. The Bloomberg European Bank/Financial Services Index is up +.6% today. Brazil is up +.5%, but still trades poorly(-9.3% ytd).
The euro is flat today and is slightly below its downward-sloping 50-day. Oil is jumping +2.0%, but remains stuck in the middle of the same range it has been in over the last year. Copper is rebounding +2.9%, but still trades poorly. The benchmark China Iron-Ore Spot Index is falling -.37%. Lumber is falling -.34%. The UBS-Bloomberg Ag Spot Index is rising +.8%, but still trades poorly. The 10Y T-Note still trades too well, with the yield flat today at 1.71%.
Stocks are rising again today on central bank hopes, better jobless claims and a rebound in commodities. The fact that central banks are upping their equity allocations, while an intermediate-term positive, will prove extremely destabilizing to the global financial system over the longer-term, in my opinion. The situation in Europe continues to detiorate and I do not believe that even lower rates well help. Emerging market economies are becoming more problematic than perceived and will likely provide the next catalyst for a US stock correction.
Disk Drive, Networking, Gaming, Education, Homebuilding, Biotech and Alt Energy shares are strong today, while Utilities, Coal, Oil Service, Paper, Drug, Hospital, REIT and Airline stocks are relatively weak. I am still positioned 50% net long.