Friday, December 26, 2025

Stocks Slightly Lower into Final Hour on Profit-Taking, Precious Metal Surge, Technical Selling, Defense/Biotech Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 50.1 +.3%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 -1.0 basis point
  • BofA Global Financial Stress Indicator -.3 -2.0 basis points 
  • European Financial Sector CDS Index 54.5 unch.
  • Emerging Market CDS Index 124.0 -.4%
  • Citi US Economic Surprise Index 5.3 +.6 point
  • Citi Eurozone Economic Surprise Index 32.7 -.3 point
  • Citi Emerging Markets Economic Surprise Index 28.7 -2.0 points 
  • S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +32.8% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 309.86 +.21:  Growth Rate +15.1% +.1 percentage point, P/E 22.4 +.1
  • S&P 500 Current Year Estimated Profit Margin 13.52% 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 483.48 +.52: Growth Rate +17.7% +.2 percentage point, P/E 33.3 unch.
  • Bloomberg Global Trade Policy Uncertainty Index 1.9 +.1
  • Bloomberg US Financial Conditions Index .82 +2.0 basis points 
  • US Yield Curve 65.0 basis points (2s/10s) +2.75 basis points
  • US Atlanta Fed GDPNow Q4 Forecast +3.0% unch.
  • Bloomberg Industrial Metal Index 163.3 +1.9% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.4% +1.7 percentage points
  • US 10-Year T-Note Yield 4.13% unch.
  • 1-Year TIPS Spread 2.30 -3.0 basis points 
  • Highest target rate probability for March 18th FOMC meeting: 46.2% (-5.1 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 45.8%(+1.4 percentage points) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -20 open in Japan 
  • China A50 Futures: Indicating +48 open in China
  • DAX Futures: Indicating +156 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/utility/consumer discretionary sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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