Tuesday, August 26, 2025

Stocks Rising into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Financial/Tech Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.5 -.07%
  • US 10-Year T-Note Yield 4.25% -2.0 basis points
  • 3-Month T-Bill Yield 4.18% -1.0 basis point
  • China Iron Ore Spot 103.0 USD/Metric Tonne +.6%
  • Dutch TTF Nat Gas(European benchmark) 33.5 euros/megawatt-hour +.6%
  • Citi US Economic Surprise Index 23.1 +7.6 points
  • Citi Eurozone Economic Surprise Index 30.4 -.9 point
  • Citi Emerging Markets Economic Surprise Index -1.0 +2.3 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(474 of 500 reporting) +11.0% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 288.99 +.17:  Growth Rate +13.3% +.2 percentage point, P/E 22.3 -.1
  • S&P 500 Current Year Estimated Profit Margin 13.43% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +23.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 472.61 +.27: Growth Rate +26.5% +.8 percentage point, P/E 32.2 -.2
  • Bloomberg US Financial Conditions Index .66 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.65 +27.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.3 unch.
  • US Yield Curve 57.75 basis points (2s/10s) +3.25 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.3% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.8% +1.3 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
  • 1-Year TIPS Spread 2.72 -2.0 basis points
  • 10-Year TIPS Spread 2.43 +1.0 basis point
  • Highest target rate probability for Oct. 29th FOMC meeting: 49.0% (-.1 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 48.4%(+1.6 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +60 open in Japan 
  • China A50 Futures: Indicating -7 open in China
  • DAX Futures: Indicating +80 open in Germany
Portfolio:
  • Higher: On gains in my tech/financial/utility/industrial/consumer discretionary sector longs and emerging market shorsts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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