Wednesday, October 29, 2025

Stocks Reversing Slightly Lower into Final Hour on Less Dovish FOMC Commentary, Higher Long-Term Rates, Profit-Taking, Consumer Discretionary/Financial Sector Weakness

Economic Gauges:
  • S&P 500 Current Quarter EPS Growth Rate YoY(222 of 500 reporting) +11.2% -.8 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 297.58 +.16:  Growth Rate +13.7% +.1 percentage point, P/E 23.2 +.1
  • S&P 500 Current Year Estimated Profit Margin 13.55% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +7.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 484.14 +.19: Growth Rate +19.2% +.1 percentage point, P/E 35.3 +.3
  • Bloomberg US Financial Conditions Index .66 -3.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.20 unch.
  • Bloomberg Global Trade Policy Uncertainty Index 2.9 -.1 point
  • US Yield Curve 46.75 basis points (2s/10s) -1.75 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.9% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 35.8% -1.5 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.85% unch.: CPI YoY +2.97% unch.
  • 1-Year TIPS Spread 2.86 -5.0 basis points
  • 10-Year TIPS Spread 2.29 -1.0 basis point
  • Highest target rate probability for Dec. 10th FOMC meeting: 65.2% (-25.7 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Jan. 28th meeting: 51.1%(+3.9 percentage points) chance of 3.5%-3.75%. (current target rate is 4.0-4.25%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -197 open in Japan 
  • China A50 Futures: Indicating +1 open in China
  • DAX Futures: Indicating +80 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/utility sector longs 
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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