Wednesday, August 27, 2025

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

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.49 -.03%
  • US 10-Year T-Note Yield 4.24% -3.0 basis points
  • 3-Month T-Bill Yield 4.17% -1.0 basis point
  • China Iron Ore Spot 103.2 USD/Metric Tonne +.6%
  • Dutch TTF Nat Gas(European benchmark) 32.6 euros/megawatt-hour -2.7%
  • Citi US Economic Surprise Index 23.7 +.6 point
  • Citi Eurozone Economic Surprise Index 29.5 -.9 point
  • Citi Emerging Markets Economic Surprise Index -1.4 -.4 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(476 of 500 reporting) +10.9% -.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 289.06 +.07:  Growth Rate +13.3% unch., P/E 22.4 +.1
  • S&P 500 Current Year Estimated Profit Margin 13.44% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +23.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 472.88 +.27: Growth Rate +26.5% unch., P/E 32.4 +.2
  • Bloomberg US Financial Conditions Index .67 +1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.56 -9.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.1 -.2
  • US Yield Curve 61.25 basis points (2s/10s) +3.5 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.2% -.1 percentage point
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 44.0% +1.2 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
  • 1-Year TIPS Spread 2.79 +7.0 basis points
  • 10-Year TIPS Spread 2.44 +1.0 basis point
  • Highest target rate probability for Oct. 29th FOMC meeting: 49.0% (-1.6 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 48.4%(-.9 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +50 open in Japan 
  • China A50 Futures: Indicating -77 open in China
  • DAX Futures: Indicating +60 open in Germany
Portfolio:
  • Higher: On gains in my tech/financial/utility/industrial/consumer discretionary sector longs and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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