Wednesday, January 29, 2025

Stocks Lower into Final Hour on a Less Dovish Post-Election Fed, Earnings Outlook Jitters, Technical Selling, Telecom/Homebuilding Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.1 -.03%
  • 3-Month T-Bill Yield 4.29% unch.
  • China Iron Ore Spot 104.60 USD/Metric Tonne -.02%
  • Dutch TTF Nat Gas(European benchmark) 51.2 euros/megawatt-hour +6.1%
  • Citi US Economic Surprise Index 8.7 +.7 point
  • Citi Eurozone Economic Surprise Index 1.8 +4.6 points
  • Citi Emerging Markets Economic Surprise Index 7.3 +.1
  • S&P 500 Current Quarter EPS Growth Rate YoY(112 of 500 reporting) +10.6% -.5 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.83 +.05:  Growth Rate +15.4% unch., P/E 22.0 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.25% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +97.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 400.11 +.17: Growth Rate +28.0% +.1 percentage point, P/E 34.1 -.2
  • Bloomberg US Financial Conditions Index .78 +7.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.80 +14.0 basis points
  • US Yield Curve 32.5 basis points (2s/10s) -1.5 basis points
  • US Atlanta Fed Q4 GDPNow Forecast +2.27% -91.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 26.0% +.2 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.83% unch.: CPI YoY +2.85% unch.
  • 10-Year TIPS Spread 2.41 unch.
  • Highest target rate probability for May 7th FOMC meeting: 56.0% (+7.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 46.3%(+1.1 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -69 open in Japan 
  • China A50 Futures: Indicating +86 open in China
  • DAX Futures: Indicating +115 open in Germany
Portfolio:
  • Higher: On gains in my industrial/financial/consumer discretionary sector longs and index hedges
  • Disclosed Trades: None
  • Market Exposure:75% Net Long

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