Wednesday, February 12, 2025

Stocks Slightly Lower into Final Hour on Long-Term Rate Surge, Diminished Fed Rate-Cut Odds, Technical Selling, Homebuilding/Energy Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.2 +.10%
  • 3-Month T-Bill Yield 4.33% +1.0 basis point
  • China Iron Ore Spot 107.6 USD/Metric Tonne -.19%
  • Dutch TTF Nat Gas(European benchmark) 55.7 euros/megawatt-hour -3.6%
  • Citi US Economic Surprise Index 4.1 +3.4 points
  • Citi Eurozone Economic Surprise Index 8.9 -1.7 points
  • Citi Emerging Markets Economic Surprise Index 6.4 -1.6 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(345 of 500 reporting) +11.5% -.5 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.80 -.11:  Growth Rate +15.9% -.1 percentage point, P/E 22.0 unch.
  • S&P 500 Current Year Estimated Profit Margin 11.86% +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 404.09 -.09: Growth Rate +30.7% unch., P/E 34.1 +.2
  • Bloomberg US Financial Conditions Index .81 unch.
  • Bloomberg Euro-Zone Financial Conditions Index 1.68 -2.0 basis points
  • US Yield Curve 26.5 basis points (2s/10s) +2.0 basis points
  • US Atlanta Fed GDPNow Q1 Forecast +2.94% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 24.7% -.1 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% +14.0 basis points: CPI YoY +2.81% -4.0 basis points
  • 10-Year TIPS Spread 2.48 +2.0 basis points
  • Highest target rate probability for May 7th FOMC meeting: 86.8% (+8.6 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 67.2%(+16.9 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +277 open in Japan 
  • China A50 Futures: Indicating +32 open in China
  • DAX Futures: Indicating +245 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/utility sector longs and index hedges
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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