Tuesday, August 12, 2025

Stocks Surging into Afternoon on US Economic Data, Rising Fed Rate-Cut Odds, Earnings Outlook Optimism, Tech/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 14.9 -8.9%
  • S&P 500 Intraday % Swing .70 +90.6%
  • Bloomberg Global Risk On/Risk Off Index 78.4 +3.1% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.9 +.45%
  • Euro/Yen Carry Return Index 194.6 +.3%
  • Emerging Markets Currency Volatility(VXY) 7.1 -.3%
  • CBOE S&P 500 Implied Correlation Index 15.4 -.7% 
  • ISE Sentiment Index 177.0 +15.0
  • Total Put/Call 1.0 +20.5%
  • NYSE Arms 1.27 unch.
  • NYSE Non-Block Money Flow +$295.0M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.3 -2.3%
  • US Energy High-Yield OAS 359.2 -.6%
  • Bloomberg TRACE # Distressed Bonds Traded 211.0 +10.0
  • European Financial Sector CDS Index 54.7 -1.4%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 120.1 -.7%
  • Italian/German 10Y Yld Spread 79.0 unch.
  • Asia Ex-Japan Investment Grade CDS Index 68.7 -.3%
  • Emerging Market CDS Index 148.3 -1.4%
  • Israel Sovereign CDS 74.3 +2.2%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.3 +.3%
  • 2-Year SOFR Swap Spread -24.5 basis points +.25 basis point
  • 3M T-Bill Treasury Repo Spread -10.5 basis points -1.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap 2.5 -.5 basis point
  • MBS  5/10 Treasury Spread 140.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 583.0 +1.0 basis point
  • Avg. Auto ABS OAS 52.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.7 +.12%
  • US 10-Year T-Note Yield 4.29% +1.0 basis point
  • 3-Month T-Bill Yield 4.22% -2.0 basis points
  • China Iron Ore Spot 104.6 USD/Metric Tonne +.2%
  • Dutch TTF Nat Gas(European benchmark) 32.4 euros/megawatt-hour -1.8%
  • Citi US Economic Surprise Index 7.9 +1.0 point
  • Citi Eurozone Economic Surprise Index 25.0 -2.0 points
  • Citi Emerging Markets Economic Surprise Index 11.6 -.3 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(454 of 500 reporting) +11.4% +n/a percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 287.17 +n/a:  Growth Rate +12.4% n/a, P/E 22.4 n/a
  • S&P 500 Current Year Estimated Profit Margin 13.45% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +23.6% +n/a percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 468.41 +n/a: Growth Rate +24.2% +n/a percentage points, P/E 32.9 n/a
  • Bloomberg US Financial Conditions Index .58 -4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.37 -15.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 6.4 unch.
  • US Yield Curve 40.5 basis points (2s/10s) -2.75 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.5% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.5% -.5 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% +4.0 basis points: CPI YoY +2.85% +13.0 basis points
  • 1-Year TIPS Spread 2.68 -9.0 basis points
  • 10-Year TIPS Spread 2.40 unch.
  • Highest target rate probability for Oct. 29th FOMC meeting: 62.4% (+6.5 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 10th meeting: 49.3%(+4.3 percentage points) chance of 3.5%-3.75%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +620 open in Japan 
  • China A50 Futures: Indicating +62 open in China
  • DAX Futures: Indicating +150 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/financial/consumer discretionary/utility sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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