Wednesday, December 10, 2025

Stocks Reversing Higher into Final Hour on More Dovish Than Expected Fed, Stable Long-Term Rates, Earnings Outlook Optimism, Financial/Homebuilding Sector Strength

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.1 -.03%
  • US 10-Year T-Note Yield 4.16% -3.0 basis points
  • 3-Month T-Bill Yield 3.68% -2.0 basis points
  • China Iron Ore Spot 102.4 USD/Metric Tonne -.34%
  • Dutch TTF Nat Gas(European benchmark) 26.6 euros/megawatt-hour -3.2%
  • Citi US Economic Surprise Index 21.8 unch.
  • Citi Eurozone Economic Surprise Index 31.7 -.4 point
  • Citi Emerging Markets Economic Surprise Index 31.6 unch.
  • S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) +12.9% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 306.31 +.13:  Growth Rate +13.8% unch., P/E 22.4 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.49% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +17.5% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 511.01 +.22: Growth Rate +24.5% +.1 percentage point, P/E 32.4 -.2
  • Bloomberg US Financial Conditions Index .68 unch.
  • Bloomberg Euro-Zone Financial Conditions Index 1.36 -5.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 2.3 +.1
  • US Yield Curve 59.5 basis points (2s/10s) +2.25 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.5% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 27.3% -.9 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.76% unch.: CPI YoY +2.96% unch.
  • 1-Year TIPS Spread 2.48 -8.0 basis points
  • 10-Year TIPS Spread 2.27 unch.
  • Highest target rate probability for Jan. 28th FOMC meeting: 73.4% (+3.6 percentage point) chance of 3.5%-3.75%. Highest target rate probability for March 18th meeting: 55.0%(+.7 percentage point) chance of 3.5%-3.75%. (current target rate is 3.75-4.0%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +270 open in Japan 
  • China A50 Futures: Indicating -42 open in China
  • DAX Futures: Indicating +60 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/financial/utility/tech/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

 

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