Monday, January 13, 2025

Stocks Reversing Slightly Higher into Final Hour on Earnings Outlook Optimism, Rotation into Value, Bargain-Hunting, Healthcare/Energy Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.8 -.1%
  • 3-Month T-Bill Yield 4.32% unch.
  • China Iron Ore Spot 99.0 USD/Metric Tonne +.3%
  • Dutch TTF Nat Gas(European benchmark) 48.3 euros/megawatt-hour +7.2%
  • Citi US Economic Surprise Index 13.1 -1.4 points
  • Citi Eurozone Economic Surprise Index -19.6 -1.2 points
  • Citi Emerging Markets Economic Surprise Index 3.3 +.6 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(22 of 500 reporting) +20.2% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 273.11 +.06:  Growth Rate +14.6% +.2 percentage point, P/E 21.2 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.59% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 395.31 +.54: Growth Rate +26.1% +.2 percentage point, P/E 32.3 -.4
  • Bloomberg US Financial Conditions Index .63 +1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.53 +4.0 basis points
  • US Yield Curve 39.25 basis points (2s/10s) +1.0 basis point
  • US Atlanta Fed Q4 GDPNow Forecast +2.73% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 19.5% -4.0 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.87% unch.: CPI YoY +2.86% unch.
  • 10-Year TIPS Spread 2.47 +3.0 basis points
  • Highest target rate probability for March 19th FOMC meeting: 79.8% (+4.3 percentage points) chance of 4.25%-4.5%. Highest target rate probability for May 7th meeting: 68.5%(+5.2 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -465 open in Japan 
  • China A50 Futures: Indicating -48 open in China
  • DAX Futures: Indicating +168 open in Germany
Portfolio:
  • Higher: On gains in my industrial/financial sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

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