Friday, May 23, 2025

Stocks Modestly Lower into Afternoon on US-Global Trade Deals Uncertainty, Earnings Outlook Jitters, Technical Selling, Tech/Retail Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.1 +.26% 
  • US 10-Year T-Note Yield 4.51% -2.0 basis points
  • 3-Month T-Bill Yield 4.33% -1.0 basis point
  • China Iron Ore Spot 98.1 USD/Metric Tonne -.02%
  • Dutch TTF Nat Gas(European benchmark) 36.5 euros/megawatt-hour +.3%
  • Citi US Economic Surprise Index 6.0 +1.8 points
  • Citi Eurozone Economic Surprise Index 12.5 +4.2 points
  • Citi Emerging Markets Economic Surprise Index 30.9 +2.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(478 of 500 reporting) +11.3% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.88 +.02:  Growth Rate +11.8% unch., P/E 21.0 -.2
  • S&P 500 Current Year Estimated Profit Margin 13.30% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +29.1% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 425.79 -.07: Growth Rate +23.1% unch., P/E 31.6 -.4
  • Bloomberg US Financial Conditions Index .27 -2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.46 -64.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 5.5 -.5
  • US Yield Curve 51.5 basis points (2s/10s) -3.25 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.4% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.0% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.40% unch.
  • 1-Year TIPS Spread 2.98 +3.0 basis points
  • 10-Year TIPS Spread 2.35 -1.0 basis point
  • Highest target rate probability for July 30th FOMC meeting: 77.6% (+4.5 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Sept. 17th meeting: 47.9%(-1.8 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -295 open in Japan 
  • China A50 Futures: Indicating +2 open in China
  • DAX Futures: Indicating +35 open in Germany
Portfolio:
  • Slightly Higher: On gains in my industrial/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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