Friday, August 22, 2025

Stocks Surging into Final Hour on Rising Fed Rate-Cut Odds, Falling Long-Term Rates, Earnings Outlook Optimism, Tech/Transport Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.6 +.3%
  • US 10-Year T-Note Yield 4.26% -7.0 basis points
  • 3-Month T-Bill Yield 4.19% -5.0 basis points
  • China Iron Ore Spot 102.7 USD/Metric Tonne +2.1%
  • Dutch TTF Nat Gas(European benchmark) 33.6 euros/megawatt-hour +1.2%
  • Citi US Economic Surprise Index 15.1 +.1 point
  • Citi Eurozone Economic Surprise Index 33.0 -4.9 points
  • Citi Emerging Markets Economic Surprise Index -2.1 -.3 point
  • 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 288.43 +.15:  Growth Rate +12.9% unch., P/E 22.4 +.3
  • 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 471.76 +1.15: Growth Rate +25.0% +.1 percentage point, P/E 32.2 +.5
  • Bloomberg US Financial Conditions Index .56 -4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.30 +12.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.3 unch.
  • US Yield Curve 56.5 basis points (2s/10s) +3.0 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.3% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.5% -.7 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
  • 1-Year TIPS Spread 2.73 +6.0 basis points
  • 10-Year TIPS Spread 2.42 +3.0 basis points
  • Highest target rate probability for Oct. 29th FOMC meeting: 49.1% (-2.4 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 48.3%(+1.4 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +350 open in Japan 
  • China A50 Futures: Indicating +127 open in China
  • DAX Futures: Indicating +43 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/tech/utility/industrial/financial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure: Moved to 100% Net Long

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