Monday, August 25, 2025

Stocks Slightly Lower into Final Hour on Higher Long-Term Rates, Dollar Strength, Profit-Taking, Transport/Pharma Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.5 -.19%
  • US 10-Year T-Note Yield 4.28% +3.0 basis points
  • 3-Month T-Bill Yield 4.19% unch.
  • China Iron Ore Spot 103.1 USD/Metric Tonne -.2%
  • Dutch TTF Nat Gas(European benchmark) 33.8 euros/megawatt-hour +.6%
  • Citi US Economic Surprise Index 15.5 +.4 point
  • Citi Eurozone Economic Surprise Index 31.3 -1.7 points
  • Citi Emerging Markets Economic Surprise Index -3.3 -1.2 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 288.82 +.39:  Growth Rate +13.1% +.2 percentage point, P/E 22.4 unch.
  • 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 472.34 +.58: Growth Rate +25.8% +.8 percentage point, P/E 32.4 +.2
  • Bloomberg US Financial Conditions Index .67 +11.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.38 +8.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.3 unch.
  • US Yield Curve 54.5 basis points (2s/10s) -2.0 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 2.74 +1.0 basis point
  • 10-Year TIPS Spread 2.42 +3.0 basis points
  • Highest target rate probability for Oct. 29th FOMC meeting: 49.2% (+.1 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 47.7%(-.7 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -199 open in Japan 
  • China A50 Futures: Indicating -52 open in China
  • DAX Futures: Indicating +60 open in Germany
Portfolio:
  • Higher: On gains in my tech sector longs, index hedges and emerging market shorsts
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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