Thursday, January 08, 2026

Stocks Slightly Higher into Final Hour on US Economic/Earnings Optimism, Sector Rotation, Technical Buying, Consumer Discretionary/Commodity Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 49.3 -.6%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 +1.0 basis point
  • BofA Global Financial Stress Indicator -.29 +3.0 basis points
  • European Financial Sector CDS Index 53.4 -.05%
  • Emerging Market CDS Index 127.1 +.01%
  • Bloomberg Global Trade Policy Uncertainty Index 1.7 -.2
  • Citi US Economic Surprise Index 8.4 +1.1 points
  • Citi Eurozone Economic Surprise Index 2 +7.8 points
  • Citi Emerging Markets Economic Surprise Index 30.2 +5.3 points 
  • S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +31.4% -1.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 311.31 +.04:  Growth Rate +15.6% unch., P/E 22.2 -.2
  • S&P 500 Current Year Estimated Profit Margin 13.50% 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 486.76 +.25: Growth Rate +18.5% +.1 percentage point, P/E 32.2 -.7
  • Bloomberg US Financial Conditions Index .80 -4.0 basis points
  • US Yield Curve 69.25 basis points (2s/10s) +2.5 basis points 
  • Bloomberg Industrial Metal Index 166.9 -1.2% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.1% -1.1 percentage points
  • US Atlanta Fed GDPNow Q4 Forecast +5.4% +2.7 percentage points
  • US 10-Year T-Note Yield 4.18% +3.0 basis points
  • 1-Year TIPS Spread 2.56 +8.0 basis points
  • Highest target rate probability for March 18th FOMC meeting: 57.1% (+.3 percentage point) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 46.5%(+1.4 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +520 open in Japan 
  • China A50 Futures: Indicating +4 open in China
  • DAX Futures: Indicating +170 open in Germany
Portfolio:
  • Lower: On losses in my biotech/tech sector longs and index hedges
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

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