Tuesday, July 22, 2025

Stocks Reversing Higher into Final Hour on Falling Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Commodity/Retail Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.8 unch.
  • US 10-Year T-Note Yield 4.34% -3.0 basis points
  • 3-Month T-Bill Yield 4.30% -2.0 basis points
  • China Iron Ore Spot 105.5 USD/Metric Tonne +.1%
  • Dutch TTF Nat Gas(European benchmark) 33.1 euros/megawatt-hour -.13%
  • Citi US Economic Surprise Index 4.7 -4.8 points
  • Citi Eurozone Economic Surprise Index 31.7 -1.4 points
  • Citi Emerging Markets Economic Surprise Index 19.0 -1.0 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(88 of 500 reporting) +7.4% -2.9 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 282.91 +.16:  Growth Rate +10.7% unch., P/E 22.3 -.1
  • S&P 500 Current Year Estimated Profit Margin 13.42% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +45.5% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 451.96 +.46: Growth Rate +19.8% +.1 percentage point, P/E 33.1 -.3
  • Bloomberg US Financial Conditions Index .54 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.44 -1.0 basis point
  • Bloomberg Global Trade Policy Uncertainty Index 7.3 -.4
  • US Yield Curve 50.75 basis points (2s/10s) -1.25 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.4% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.9% -1.0 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.73% unch.
  • 1-Year TIPS Spread 2.85 -1.0 basis point
  • 10-Year TIPS Spread 2.40 -2.0 basis points
  • Highest target rate probability for Sept. 17th FOMC meeting: 55.9% (-.1 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 48.4%(+.1 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Polymarket:
  • Which Countries Will the US Agree to Tariff Agreements with Before August? 
  • EU 25.0% -4.0 percentage points.
  • India 7.0% -9.0 percentage points.
  • Japan 14.0% -1.0 percentage point. 
  • South Korea  25.0% +1.0 percentage point.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -109 open in Japan 
  • China A50 Futures: Indicating +53 open in China
  • DAX Futures: Indicating +140 open in Germany
Portfolio:
  • Slightly Higher: On gains in my utility/consumer discretionary/industrial/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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