Thursday, May 23, 2024

Stocks Reversing Lower into Final Hour on Falling Fed Rate-Cut Odds, Rising Long-Term Rates, Profit-Taking, Alt Energy/Consumer Discretionary Sector Weakness

Economic Gauges:
  • S&P 500 Current Quarter EPS Growth Rate YoY(478 of 500 reporting) +7.7% +2.8 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 256.29 +.25:  Growth Rate +12.4% unch., P/E 20.8 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.88% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +52.9% +15.7 percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 328.54 +.16: Growth Rate +22.5% -14.2%, P/E 32.2 +.2
  • Bloomberg US Financial Conditions Index 1.10 +17.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .97 +4.0 basis points
  • US Yield Curve -46.0 basis points (2s/10s) -1.25 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.6% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 46.8% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.37% unch.
  • 10-Year TIPS Spread 2.32 -2.0 basis points
  • Highest target rate probability for July 31st FOMC meeting: 88.9%(+6.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 48.4%(+6.5 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -598 open in Japan 
  • China A50 Futures: Indicating -70 open in China
  • DAX Futures: Indicating -55 open in Germany
Portfolio:
  • Lower:  On losses in my financial/consumer discretionary/industrial/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  • Market Exposure: Moved to 75% Net Long

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