Friday, February 14, 2025

Stocks Slightly Higher into Final Hour on Plunging Long-Term Rates, Higher Fed Rate-Cut Odds, Earnings Outlook Optimism, Financial/Gambling Sector Strength

Economic Gauges:

  • Bloomberg Emerging Markets Currency Index 37.4 +.08%
  • 3-Month T-Bill Yield 4.31% -1.0 basis point
  • China Iron Ore Spot 105.0 USD/Metric Tonne -1.1%
  • Dutch TTF Nat Gas(European benchmark) 50.7 euros/megawatt-hour -1.4%
  • Citi US Economic Surprise Index -.5 -5.4 points
  • Citi Eurozone Economic Surprise Index 15.0 +2.9 points
  • Citi Emerging Markets Economic Surprise Index 5.6 +.6 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(384 of 500 reporting) +10.4% -.6 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.99 +.05:  Growth Rate +16.0% unch., P/E 22.2 +.1
  • S&P 500 Current Year Estimated Profit Margin 11.81% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +26.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 404.53 +.20: Growth Rate +30.8% +.1 percentage point, P/E 34.6 +.3
  • Bloomberg US Financial Conditions Index .83 +2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.60 -10.0 basis points
  • US Yield Curve 21.5 basis points (2s/10s) unch.
  • US Atlanta Fed GDPNow Q1 Forecast +2.34% -60.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.7% +2.5 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.81% unch.
  • 10-Year TIPS Spread 2.44 -1.0 basis point
  • Highest target rate probability for May 7th FOMC meeting: 79.5% (-4.6 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 48.7%(-10.9 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -9 open in Japan 
  • China A50 Futures: Indicating +73 open in China
  • DAX Futures: Indicating +57 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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