Tuesday, January 06, 2026

Stocks Rising into Final Hour on US Economic/Earnings Strength, AI Infrastructure Build-Out Optimism, Stable Long-Term Rates

Economic/Market Gauges:

  • North American Investment Grade CDS Index 49.0 -.4%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .26 unch.
  • BofA Global Financial Stress Indicator -.30 -2.0 basis points
  • European Financial Sector CDS Index 53.3 unch.
  • Emerging Market CDS Index 124.2 -.6%
  • Bloomberg Global Trade Policy Uncertainty Index 1.9 -.7
  • Citi US Economic Surprise Index 11.3 -1.0 point
  • Citi Eurozone Economic Surprise Index 21.7 -5.8 points
  • Citi Emerging Markets Economic Surprise Index 30.3 -.2 point 
  • 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 311.16 +.12:  Growth Rate +15.6% +.1 percentage point, P/E 22.2 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.50% -1.0 basis point
  • 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 486.24 +.28: Growth Rate +18.3% unch., P/E 32.2 -.2
  • Bloomberg US Financial Conditions Index .80 unch.
  • US Yield Curve 70.5 basis points (2s/10s) -.25 basis point 
  • Bloomberg Industrial Metal Index 173.5 +2.6% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.7% -.3 percentage point
  • US Atlanta Fed GDPNow Q4 Forecast +2.7% unch.
  • US 10-Year T-Note Yield 4.17% +1.0 basis point
  • 1-Year TIPS Spread 2.46 +3.0 basis points
  • Highest target rate probability for March 18th FOMC meeting: 52.8% (+3.9 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 43.0%(-2.2 percentage points) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -338 open in Japan 
  • China A50 Futures: Indicating -37 open in China
  • DAX Futures: Indicating +215 open in Germany
Portfolio:
  • Higher: On gains in my consumer discretionary/tech/industrial/financial/utility sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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