Wednesday, January 28, 2026

Stocks Slightly Lower into Final Hour on Diminishing Fed Rate-Cut Odds, Precious Metal Mania, Technical Selling, Pharma/Oil Service Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 48.9 -.2%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .19 -1.0 basis point
  • BofA Global Financial Stress Indicator -.18 -1.0 basis point
  • European Financial Sector CDS Index 53.5 +1.4%
  • Emerging Market CDS Index 125.6 +.7%
  • Bloomberg Global Trade Policy Uncertainty Index 4.4 -.6
  • Citi US Economic Surprise Index 25.5 -.2 point
  • Citi Eurozone Economic Surprise Index 6.1 -.9 point
  • Citi Emerging Markets Economic Surprise Index 17.9 +2.0 point 
  • S&P 500 Current Quarter EPS Growth Rate YoY(104 of 500 reporting) +20.4% -1.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 314.07 +.14:  Growth Rate +16.6% unch., P/E 22.2 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.10% +1.0 basis point
  • 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 492.73 +.29: Growth Rate +19.9% +.1 percentage point, P/E 31.6 -.3
  • Bloomberg US Financial Conditions Index .83 +2.0 basis points
  • US Yield Curve 66.5 basis points (2s/10s) +1.0 basis point 
  • Bloomberg Industrial Metal Index 173.7 +.9% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.0% -.1 percentage point
  • US Atlanta Fed GDPNow Q4 Forecast +5.4% unch.
  • US 10-Year T-Note Yield 4.25% unch.
  • 1-Year TIPS Spread 3.17 +8.0 basis points
  • Highest target rate probability for March 18th FOMC meeting: 88.1% (+5.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 73.0%(+4.5 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +550 open in Japan 
  • China A50 Futures: Indicating -43 open in China
  • DAX Futures: Indicating +140 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/industrial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

No comments: