Friday, May 30, 2025

Stocks Modestly Lower into Afternoon on Escalating US-China Trade Tensions, Earnings Outlook Jitters, Profit-Taking, Tech/Biotech Sector Weakness

Economic Gauges:

  • Bloomberg Emerging Markets Currency Index 36.98 -.41% 
  • US 10-Year T-Note Yield 4.41% unch.
  • 3-Month T-Bill Yield 4.34% unch.
  • China Iron Ore Spot 95.4 USD/Metric Tonne -.3%
  • Dutch TTF Nat Gas(European benchmark) 34.2 euros/megawatt-hour -3.3%
  • Citi US Economic Surprise Index 11.5 -.4 point
  • Citi Eurozone Economic Surprise Index 17.7 +2.8 points
  • Citi Emerging Markets Economic Surprise Index 39.0 +3.5 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(491 of 500 reporting) +12.5% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 276.68 +.39:  Growth Rate +8.9% +.2 percentage point, P/E 21.3 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.26% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +32.5% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 428.13 +1.67: Growth Rate +23.8% +.5 percentage point, P/E 32.0 -.2
  • Bloomberg US Financial Conditions Index .32 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.43 -2.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 7.6 +.8
  • US Yield Curve 50.25 basis points (2s/10s) +2.0 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.8% +1.6 percentage points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.8% +4.3 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.65% +5.0 basis points: CPI YoY +2.40% unch.
  • 1-Year TIPS Spread 2.84 +6.0 basis points
  • 10-Year TIPS Spread 2.35 +3.0 basis points
  • Highest target rate probability for July 30th FOMC meeting: 73.1% (-4.5 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Sept. 17th meeting: 55.3%(+1.9 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -329 open in Japan 
  • China A50 Futures: Indicating -144 open in China
  • DAX Futures: Indicating +33 open in Germany
Portfolio:
  • Slightly Lower: On losses in my financial/tech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
  • Market Exposure: 75% Net Long

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