Monday, October 20, 2025

Stocks Surging into Final Hour on Lower Long-Term Rates, US/China Trade Deal Hopes, Earnings Outlook Optimism, Alt Energy/Commodity Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.3 +.07%
  • US 10-Year T-Note Yield 3.96 -3.0 basis points
  • 3-Month T-Bill Yield 3.89% -3.0 basis points
  • China Iron Ore Spot 103.5 USD/Metric Tonne -.03%
  • Dutch TTF Nat Gas(European benchmark) 31.7 euros/megawatt-hour -.2%
  • Citi US Economic Surprise Index 10.8 +1.0 point
  • Citi Eurozone Economic Surprise Index -3.4 -1.4 points
  • Citi Emerging Markets Economic Surprise Index 10.0 +1.3 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(58 of 500 reporting) +16.0% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 296.36 +.44:  Growth Rate +13.2% +.2 percentage point, P/E 22.7 +.3
  • 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 481.57 +.75: Growth Rate +18.5% +.2 percentage point, P/E 34.0 +.6
  • Bloomberg US Financial Conditions Index .43 +22.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.13 -14.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.5 -.4 point
  • US Yield Curve 52.25 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) 39.6% -1.6 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.87% unch.: CPI YoY +2.99% unch.
  • 1-Year TIPS Spread 2.60 -1.0 basis point
  • 10-Year TIPS Spread 2.26 -1.0 basis point
  • Highest target rate probability for Dec. 10th FOMC meeting: 96.1% (+2.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Jan. 28th meeting: 52.4%(-.3 percentage points) chance of 3.25%-3.5%. (current target rate is 4.0-4.25%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +640 open in Japan 
  • China A50 Futures: Indicating +32 open in China
  • DAX Futures: Indicating +180 open in Germany
Portfolio:
  • Higher: On gains in my tech/utility/industrial/biotech/consumer discretionary sector longs 
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, added some biotech longs
  • Market Exposure: Moved to 100% Net Long

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