Thursday, December 18, 2025

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

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.08 +.03%
  • US 10-Year T-Note Yield 4.12% -4.0 basis points
  • 3-Month T-Bill Yield 3.60% -2.0 basis points
  • China Iron Ore Spot 104.6 USD/Metric Tonne -.3%
  • Dutch TTF Nat Gas(European benchmark) 27.7 euros/megawatt-hour +1.1%
  • Citi US Economic Surprise Index .8 -2.1 points
  • Citi Eurozone Economic Surprise Index 30.9 +.4 point
  • Citi Emerging Markets Economic Surprise Index 30.8 -.6 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(10 of 500 reporting) +40.9% +18.8 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 307.49 +.07:  Growth Rate +14.2% unch., P/E 22.1 +.2
  • S&P 500 Current Year Estimated Profit Margin 13.50% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a +n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 517.10 +.18: Growth Rate +25.8% unch., P/E 30.4 +.2
  • Bloomberg US Financial Conditions Index .48 -17.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.44 +1.0 basis point
  • Bloomberg Global Trade Policy Uncertainty Index 1.5 unch.
  • US Yield Curve 65.5 basis points (2s/10s) -1.0 basis point
  • US Atlanta Fed GDPNow Q2 Forecast +3.5% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 29.2% +.9 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.76% unch.: CPI YoY +2.96% unch.
  • 1-Year TIPS Spread 2.23 -7.0 basis points
  • 10-Year TIPS Spread 2.24 unch.
  • Highest target rate probability for March 18th FOMC meeting: 46.8% (+2.4 percentage points) chance of 3.25%-3.5%. Highest target rate probability for April 29th meeting: 45.5%(+.7 percentage point) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +420 open in Japan 
  • China A50 Futures: Indicating +22 open in China
  • DAX Futures: Indicating -75 open in Germany
Portfolio:
  • Higher: On gains in my tech/utility/industrial/financial/consumer discretionary sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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