Monday, January 26, 2026

Stocks Rising into Final Hour on US Economic/Earnings Outlook Optimism, Lower Long-Term Rates, Technical Buying, Tech/Financial Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 48.8 -.7%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .22 +2.0 basis points
  • BofA Global Financial Stress Indicator -.21 unch.
  • European Financial Sector CDS Index 53.0 -.5%
  • Emerging Market CDS Index 124.7 -.7%
  • Bloomberg Global Trade Policy Uncertainty Index 6.0 +.8
  • Citi US Economic Surprise Index 28.5 +3.3 points
  • Citi Eurozone Economic Surprise Index 8.7 -8.7 points
  • Citi Emerging Markets Economic Surprise Index 14.6 -2.3 points 
  • S&P 500 Current Quarter EPS Growth Rate YoY(64 of 500 reporting) +17.6% +.5 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 313.76 +.46:  Growth Rate +16.5% +.1 percentage point, P/E 22.2 +.1
  • S&P 500 Current Year Estimated Profit Margin 13.09% -9.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +40.2% +n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 492.2 +.73: Growth Rate +19.8% +.2 percentage point, P/E 31.7 +.7
  • Bloomberg US Financial Conditions Index .81 +3.0 basis points
  • US Yield Curve 61.75 basis points (2s/10s) -.75 basis points 
  • Bloomberg Industrial Metal Index 174.2 +.84% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.1% +.2 percentage point
  • US Atlanta Fed GDPNow Q4 Forecast +5.4% unch.
  • US 10-Year T-Note Yield 4.21% -2.0 basis points
  • 1-Year TIPS Spread 3.0 unch.
  • Highest target rate probability for March 18th FOMC meeting: 84.1% (-.5 percentage point) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 71.9%(+1.3 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -750 open in Japan 
  • China A50 Futures: Indicating -1 open in China
  • DAX Futures: Indicating +101 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech/industrial/financial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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