Monday, October 27, 2025

Stocks Surging into Final Hour on US-China Trade Deal Hopes, Earnings Outlook Optimism, Stable Long-Term Rates, Tech/Biotech Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.3 +.11%
  • US 10-Year T-Note Yield 3.99% -1.0 basis point
  • 3-Month T-Bill Yield 3.80% -4.0 basis points
  • China Iron Ore Spot 105.6 USD/Metric Tonne +.3%
  • Dutch TTF Nat Gas(European benchmark) 31.4 euros/megawatt-hour -1.9%
  • Citi US Economic Surprise Index 9.8 -1.0 point
  • Citi Eurozone Economic Surprise Index 4.3 +8.6 points
  • Citi Emerging Markets Economic Surprise Index 14.6 +4.8 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(147 of 500 reporting) +15.0% +1.8 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 297.27 +.54:  Growth Rate +13.5% +.2 percentage point, P/E 23.1 +.4
  • S&P 500 Current Year Estimated Profit Margin 13.54% -2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +7.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 483.64 +.86: Growth Rate +19.0% +.2 percentage point, P/E 34.6 +.8
  • Bloomberg US Financial Conditions Index .65 +15.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.23 +13.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 2.9 -.4 point
  • US Yield Curve 49.25 basis points (2s/10s) -1.5 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.9% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.3% -1.7 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.85% -2.0 basis points: CPI YoY +2.97% -2.0 basis points
  • 1-Year TIPS Spread 2.91 -4.0 basis points
  • 10-Year TIPS Spread 2.29 -1.0 basis point
  • Highest target rate probability for Dec. 10th FOMC meeting: 93.0% (+1.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Jan. 28th meeting: 49.1%(+4.2 percentage points) chance of 3.5%-3.75%. (current target rate is 4.0-4.25%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +8 open in Japan 
  • China A50 Futures: Indicating +14 open in China
  • DAX Futures: Indicating +80 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/consumer discretionary/biotech sector longs 
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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