Thursday, September 25, 2025

Stocks Lower into Final Hour on Higher Long-Term Rates, Escalating Russia/NATO Tensions, Diminished Fed Rate-Cut Odds, Consumer Discretionary/Pharma Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.3 -.32%
  • US 10-Year T-Note Yield 4.17% +2.0 basis points
  • 3-Month T-Bill Yield 3.98% +2.0 basis points
  • China Iron Ore Spot 105.8 USD/Metric Tonne -.1%
  • Dutch TTF Nat Gas(European benchmark) 32.5 euros/megawatt-hour +1.7%
  • Citi US Economic Surprise Index 26.1 +17.2 points
  • Citi Eurozone Economic Surprise Index 10.7 -.4 point
  • Citi Emerging Markets Economic Surprise Index 5.4 +.3 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(13 of 500 reporting) +16.6% -1.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 293.26 +.23:  Growth Rate +12.1% +.4 percentage point, P/E 22.6 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.51% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 489.43 -.95: Growth Rate +20.5% +1.6 percentage points, P/E 33.0 +.2
  • Bloomberg US Financial Conditions Index .72 +2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.54 -56.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 2.7 -.4
  • US Yield Curve 50.5 basis points (2s/10s) -4.0 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.3% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 34.8% -.3 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.99% unch.: CPI YoY +3.0% unch.
  • 1-Year TIPS Spread 2.75 +1.0 basis point
  • 10-Year TIPS Spread 2.39 +1.0 basis point
  • Highest target rate probability for Dec. 10th FOMC meeting: 60.4% (-12.9 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Jan. 28th meeting: 51.5%(-.4 percentage point) chance of 3.5%-3.75%. (current target rate is 4.0-4.25%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -339 open in Japan 
  • China A50 Futures: Indicating -23 open in China
  • DAX Futures: Indicating +148 open in Germany
Portfolio:
  • Slightly Higher: On gains in my utility sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

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