Tuesday, December 30, 2025

Stocks Slightly Lower into Final Hour on Higher Long-Term Rates, Geopolitical Tensions, Year-End Positioning, Biotech/Alt Energy Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 50.0 -.9%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .26 +2.0 basis points
  • BofA Global Financial Stress Indicator -.29 +1.0 basis point
  • European Financial Sector CDS Index 54.3 -.6%
  • Emerging Market CDS Index 125.0 unch.
  • Bloomberg Global Trade Policy Uncertainty Index 2.3 +.4
  • Citi US Economic Surprise Index 8.3 +1.0 point
  • Citi Eurozone Economic Surprise Index 32.5 unch.
  • Citi Emerging Markets Economic Surprise Index 29.1 -3.3 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 310.26 +.10:  Growth Rate +15.2% unch., P/E 22.2 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.50% -2.0 basis points
  • 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 484.46 +.20: Growth Rate +17.9% unch., P/E 32.9 unch.
  • Bloomberg US Financial Conditions Index .77 -4.0 basis points
  • US Yield Curve 67.25 basis points (2s/10s) +2.25 basis points 
  • Bloomberg Industrial Metal Index 164.6 +2.9% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.8% +.1 percentage point
  • US Atlanta Fed GDPNow Q4 Forecast +3.0% unch. 
  • US 10-Year T-Note Yield 4.13% +2.0 basis points
  • 1-Year TIPS Spread 2.33 unch.
  • Highest target rate probability for March 18th FOMC meeting: 48.0% (+.6 percentage point) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 46.0%(+.1 percentage point) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -115 open in Japan 
  • China A50 Futures: Indicating -46 open in China
  • DAX Futures: Indicating +180 open in Germany
Portfolio:
  • Slightly Higher: On gains in my utility/tech sector longs and index hedges
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

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