Monday, June 03, 2024

Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Concerns, Technical Selling, Energy/Construction Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.7 +.30%
  • 3-Month T-Bill Yield 5.40% -1.0 basis point
  • China Iron Ore Spot 111.1 USD/Metric Tonne +1.0%
  • Dutch TTF Nat Gas(European benchmark) 36.0 euros/megawatt-hour +5.2%
  • Citi US Economic Surprise Index -8.9 -1.3 points
  • Citi Eurozone Economic Surprise Index 26.7 -.8 point
  • Citi Emerging Markets Economic Surprise Index 11.5 -3.8 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(490 of 500 reporting) +7.8% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 257.82 +.34:  Growth Rate +13.1% +.2 percentage point, P/E 20.4 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.87% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +52.9% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 329.71 +.43: Growth Rate +23.0% +.2 percentage point, P/E 31.5 -.3
  • Bloomberg US Financial Conditions Index 1.02 unch.
  • Bloomberg Euro-Zone Financial Conditions Index 1.01 +16.0 basis points
  • US Yield Curve -41.75 basis points (2s/10s) -4.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +1.8% -170 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 47.5% +3.0 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.69% -5.0 basis points: CPI YoY +3.36% unch.
  • 10-Year TIPS Spread 2.33 -4.0 basis points
  • Highest target rate probability for July 31st FOMC meeting: 85.5%(+1.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 51.4%(+4.4 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -313 open in Japan 
  • China A50 Futures: Indicating -113 open in China
  • DAX Futures: Indicating -15 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my biotech/consumer discretionary/tech sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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