Monday, January 05, 2026

Stocks Higher into Final Hour on US Economic/Earnings Optimism, Diminished Geopolitical Angst, Lower Long-Term Rates, Energy/Financial Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 49.4 -1.5%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .26 +1.0 basis point
  • BofA Global Financial Stress Indicator -.28 -1.0 basis point
  • European Financial Sector CDS Index 53.3 -1.2%
  • Emerging Market CDS Index 124.8 +.8%
  • Bloomberg Global Trade Policy Uncertainty Index 2.6 +.2
  • Citi US Economic Surprise Index 12.3 -1.9 points
  • Citi Eurozone Economic Surprise Index 27.5 +1.3 points
  • Citi Emerging Markets Economic Surprise Index 30.5 -1.6 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 311.04 +.46:  Growth Rate +15.5% +.1 percentage point, P/E 22.2 +.2
  • S&P 500 Current Year Estimated Profit Margin 13.51% 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 485.96 +.74: Growth Rate +18.3% +.2 percentage point, P/E 32.4 +.3
  • Bloomberg US Financial Conditions Index .80 +3.0 basis points
  • US Yield Curve 70.75 basis points (2s/10s) -.25 basis point 
  • Bloomberg Industrial Metal Index 169.1 +3.1% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 29.0% -.1 percentage point
  • US Atlanta Fed GDPNow Q4 Forecast +2.7% -.3 percentage point
  • US 10-Year T-Note Yield 4.16% -3.0 basis point
  • 1-Year TIPS Spread 2.43 +7.0 basis points
  • Highest target rate probability for March 18th FOMC meeting: 49.3% (+.4 percentage point) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 45.2%(unch.) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +410 open in Japan 
  • China A50 Futures: Indicating +18 open in China
  • DAX Futures: Indicating +123 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/tech/industrial/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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