Monday, September 15, 2025

Stocks Higher into Final Hour on Lower Long-Term Rates, Fed Rate-Cut Hopes, Earnings Outlook Optimism, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 15.7 +6.0%
  • S&P 500 Intraday % Swing .26 +15.9%
  • Bloomberg Global Risk On/Risk Off Index 83.2 -.4% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.96 +.25%
  • Euro/Yen Carry Return Index 195.73 unch.
  • Emerging Markets Currency Volatility(VXY) 6.75 -1.6%
  • CBOE S&P 500 Implied Correlation Index 14.1 +.8% 
  • ISE Sentiment Index 202.0 +39.0
  • Total Put/Call .87 +10.1%
  • NYSE Arms .96 -18.0%
  • NYSE Non-Block Money Flow +$113.7M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 47.0 -1.6%
  • US Energy High-Yield OAS 350.0 -.7%
  • Bloomberg TRACE # Distressed Bonds Traded 210.0 -11.0
  • European Financial Sector CDS Index 53.0 -1.8%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 118.5 -1.6%
  • Italian/German 10Y Yld Spread 78.0 -3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 60.9 +.9%
  • Emerging Market CDS Index 139.4 -.6%
  • Israel Sovereign CDS 75.6 -.9%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.57 +.24%
  • 2-Year SOFR Swap Spread -24.0 basis points +.25 basis point
  • 3M T-Bill Treasury Repo Spread -41.25 basis points -1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap 1.55 +.75 basis point
  • MBS  5/10 Treasury Spread 116.0 -4.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 588.0 -1.0 basis point
  • Avg. Auto ABS OAS 50.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.5 +.2%
  • US 10-Year T-Note Yield 4.04% -3.0 basis points
  • 3-Month T-Bill Yield 3.99% -3.0 basis points
  • China Iron Ore Spot 107.2 USD/Metric Tonne +1.5%
  • Dutch TTF Nat Gas(European benchmark) 32.2 euros/megawatt-hour -1.6%
  • Citi US Economic Surprise Index 9.7 -3.2 points
  • Citi Eurozone Economic Surprise Index 17.9 -1.5 points
  • Citi Emerging Markets Economic Surprise Index 6.3 -5.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(2 of 500 reporting) +8.3% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 292.44 +.52:  Growth Rate +11.7% +.2 percentage point, P/E 22.6 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.48% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 486.22 +1.13: Growth Rate +18.9% +.3 percentage point, P/E 33.3 +.3
  • Bloomberg US Financial Conditions Index .73 +8.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.47 unch.
  • Bloomberg Global Trade Policy Uncertainty Index 2.6 unch.
  • US Yield Curve 49.75 basis points (2s/10s) +1.5 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.1% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.6% -1.0 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.99% unch.: CPI YoY +3.01% unch.
  • 1-Year TIPS Spread 2.72 +3.0 basis points
  • 10-Year TIPS Spread 2.37 +1.0 basis point
  • Highest target rate probability for Oct. 29th FOMC meeting: 74.8% (-5.2 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 10th meeting: 68.2%(-5.8 percentage points) chance of 3.5%-3.75%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -68 open in Japan 
  • China A50 Futures: Indicating +49 open in China
  • DAX Futures: Indicating +2 open in Germany
Portfolio:
  • Slightly Higher: On gains in my utility/tech/industrial/consumer discretionary sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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