Wednesday, June 25, 2025

Stocks Slightly Higher into Final Hour on Israel-Iran Ceasefire Holding, Earnings Outlook Optimism, Technical Buying, Tech/Defense Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 17.3 -1.3%
  • S&P 500 Intraday % Swing .32 -38.0%
  • Bloomberg Global Risk On/Risk Off Index 72.6 +1.2% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.91 +.15%
  • Euro/Yen Carry Return Index 190.41 +.58%
  • Emerging Markets Currency Volatility(VXY) 7.99 -.37%
  • CBOE S&P 500 Implied Correlation Index 18.54 -2.1% 
  • ISE Sentiment Index 186.0 +44.0
  • Total Put/Call .76 -13.6%
  • NYSE Arms 1.12 -18.3%
  • NYSE Non-Block Money Flow -$58.4M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 53.2 +.7%
  • US Energy High-Yield OAS 391.0 -.47%
  • Bloomberg TRACE # Distressed Bonds Traded 207.0 +1.0
  • European Financial Sector CDS Index 60.6 +.2%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 134.8 -.4%
  • Italian/German 10Y Yld Spread 92.0 unch.
  • Asia Ex-Japan Investment Grade CDS Index 76.37 +1.8%
  • Emerging Market CDS Index 162.0 +1.4%
  • Israel Sovereign CDS 94.7 +.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.0 -.03%
  • 2-Year SOFR Swap Spread -21.75 basis points +1.75 basis points
  • 3M T-Bill Treasury Repo Spread .75 basis point +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap .25 +1.5 basis points
  • MBS  5/10 Treasury Spread 150.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 598.0 unch.
  • Avg. Auto ABS OAS 57.0 +1.0 basis  point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.1 -.1%
  • US 10-Year T-Note Yield 4.30% +1.0 basis point
  • 3-Month T-Bill Yield 4.29% +2.0 basis points
  • China Iron Ore Spot 92.7 USD/Metric Tonne -.1%
  • Dutch TTF Nat Gas(European benchmark) 35.4 euros/megawatt-hour -.6%
  • Citi US Economic Surprise Index -26.0 -1.4 points
  • Citi Eurozone Economic Surprise Index 29.2 +2.1 points
  • Citi Emerging Markets Economic Surprise Index 29.2 -.3 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(13 of 500 reporting) +3.3% -.8 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 279.85 +.14:  Growth Rate +10.0% unch., P/E 21.8 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.26% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 444.34 +.61: Growth Rate +19.0% +.2 percentage point, P/E 32.7 +.3
  • Bloomberg US Financial Conditions Index .43 +10.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.18 +12.0.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.3 -.5
  • US Yield Curve 50.75 basis points (2s/10s) +3.0 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.4% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 44.3% +3.0 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.64% unch.
  • 1-Year TIPS Spread 2.52 -1.0 basis point
  • 10-Year TIPS Spread 2.30 +1.0 basis point
  • Highest target rate probability for Sept. 17th FOMC meeting: 67.1% (-2.9 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 50.5%(+.1 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Polymarket:
  • US-EU Trade Agreement by July 9th 37.0% +2.0 percentage points 
  • Reconciliation Bill Passed by July 31st 85.0% +7.0 percentage points
Overseas Futures:
  • Nikkei 225 Futures: Indicating +53 open in Japan 
  • China A50 Futures: Indicating -21 open in China
  • DAX Futures: Indicating +110 open in Germany
Portfolio:
  • Higher: On gains in my financial/tech sector longs and index hedges
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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