Thursday, August 28, 2025

Stocks Reversing Higher into Final Hour on Falling Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Tech/Alt Energy Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.53 +.13%
  • US 10-Year T-Note Yield 4.21% -3.0 basis points
  • 3-Month T-Bill Yield 4.17% unch.
  • China Iron Ore Spot 103.6 USD/Metric Tonne -.6%
  • Dutch TTF Nat Gas(European benchmark) 31.6 euros/megawatt-hour -3.1%
  • Citi US Economic Surprise Index 26.8 +3.1 points
  • Citi Eurozone Economic Surprise Index 25.6 -3.9 points
  • Citi Emerging Markets Economic Surprise Index 1.3 +2.7 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(486 of 500 reporting) +12.4% +1.5 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 289.22 +.16:  Growth Rate +10.4% -2.9 percentage points, P/E 22.4 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.43% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +27.9% +4.3 percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 473.36 +.48: Growth Rate +15.8% -10.7 percentage points, P/E 32.7 +.3
  • Bloomberg US Financial Conditions Index .65 -2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.41 -15.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.3 +.2
  • US Yield Curve 57.0 basis points (2s/10s) -4.25 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.2% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 45.4% +1.4 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
  • 1-Year TIPS Spread 2.78 -1.0 basis point
  • 10-Year TIPS Spread 2.42 -2.0 basis points
  • Highest target rate probability for Oct. 29th FOMC meeting: 48.3% (-.7 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 47.7%(-.8 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +120 open in Japan 
  • China A50 Futures: Indicating -11 open in China
  • DAX Futures: Indicating +70 open in Germany
Portfolio:
  • Higher: On gains in my tech/financial/utility/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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