Tuesday, July 15, 2025

Stocks Reversing Lower into Final Hour on Surging Long-Term Rates, US-Global Trade Deal Uncertainty, Technical Selling, Homebuilding/Pharma Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 16.9 -2.0%
  • S&P 500 Intraday % Swing .69 +25.4%
  • Bloomberg Global Risk On/Risk Off Index 77.7 +.5% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.96 -.31%
  • Euro/Yen Carry Return Index 194.56 +.23%
  • Emerging Markets Currency Volatility(VXY) 7.75 -1.7%
  • CBOE S&P 500 Implied Correlation Index 18.7 -1.8% 
  • ISE Sentiment Index 193.0 +7.0
  • Total Put/Call .76 -10.6%
  • NYSE Arms .60 -35.5%
  • NYSE Non-Block Money Flow -$89.2M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 51.6 +1.3%
  • US Energy High-Yield OAS 377.0 +.33%
  • Bloomberg TRACE # Distressed Bonds Traded 201.0 +11.0
  • European Financial Sector CDS Index 58.9 +.4%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 127.96 -.31%
  • Italian/German 10Y Yld Spread 86.0 unch.
  • Asia Ex-Japan Investment Grade CDS Index 73.8 -.6%
  • Emerging Market CDS Index 156.2 +.03%
  • Israel Sovereign CDS 77.0 -1.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.97 -.08%
  • 2-Year SOFR Swap Spread -25.25 basis points -.5 basis point
  • 3M T-Bill Treasury Repo Spread 1.5 basis point +.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap .75 unch.
  • MBS  5/10 Treasury Spread 146.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 599.0 +1.0 basis point
  • Avg. Auto ABS OAS 53.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.8 -.14%
  • US 10-Year T-Note Yield 4.49% +5.0 basis points
  • 3-Month T-Bill Yield 4.34% +1.0 basis point
  • China Iron Ore Spot 98.7 USD/Metric Tonne -.3%
  • Dutch TTF Nat Gas(European benchmark) 34.4 euros/megawatt-hour -2.9%
  • Citi US Economic Surprise Index 2.8 unch.
  • Citi Eurozone Economic Surprise Index 35.6 +3.5 points
  • Citi Emerging Markets Economic Surprise Index 20.1 -.5 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(27 of 500 reporting) +8.3% +7.5 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 281.82 +.02:  Growth Rate +10.8% 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(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 449.08 +.18: Growth Rate +20.3% +.1 percentage point, P/E 33.4 +.3
  • Bloomberg US Financial Conditions Index .57 -2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.33 -11.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 9.7 +.2
  • US Yield Curve 53.0 basis points (2s/10s) unch.
  • US Atlanta Fed GDPNow Q2 Forecast +2.6% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.5% -1.5 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% -2.0 basis points: CPI YoY +2.73% +9.0 basis points
  • 1-Year TIPS Spread 2.77 unch.
  • 10-Year TIPS Spread 2.42 +2.0 basis points
  • Highest target rate probability for Sept. 17th FOMC meeting: 52.6% (-6.7 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Oct. 29th meeting: 49.2%(+3.2 percentage points) 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 38.0% +1.0 percentage point.
  • India 57.0% +13.0 percentage points.
  • Japan 21.0% +2.0 percentage points
  • South Korea  40.0% -3.0 percentage points.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +17 open in Japan 
  • China A50 Futures: Indicating -46 open in China
  • DAX Futures: Indicating +103 open in Germany
Portfolio:
  • Slightly Lower: On losses in my utility/consumer discretionary/financial sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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