Wednesday, January 21, 2026

Stocks Surging into Final Hour on US/Greenland Deal Optimism, Falling Long-Term Rates, Less Global Tariff Uncertainty, Financial/Energy Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 48.9 -2.6%
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .20 unch.
  • BofA Global Financial Stress Indicator -.16 +6.0 basis points
  • European Financial Sector CDS Index 54.7 -1.4%
  • Emerging Market CDS Index 125.8 -3.0%
  • Bloomberg Global Trade Policy Uncertainty Index 4.7 +.8
  • Citi US Economic Surprise Index 17.6 -.7 point
  • Citi Eurozone Economic Surprise Index 17.9 -2.7 points
  • Citi Emerging Markets Economic Surprise Index 19.9 -.6 point 
  • S&P 500 Current Quarter EPS Growth Rate YoY(49 of 500 reporting) +18.1% +1.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 313.17 -.21:  Growth Rate +16.3% -.1 percentage point, P/E 21.8 -.1
  • S&P 500 Current Year Estimated Profit Margin 13.30% +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 491.70 +.14: Growth Rate +19.7% +.1 percentage point, P/E 30.4 -.6
  • Bloomberg US Financial Conditions Index .65 +7.0 basis points
  • US Yield Curve 66.25 basis points (2s/10s) -3.25 basis points 
  • Bloomberg Industrial Metal Index 168.1 +.04% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 26.3% +1.2 percentage points
  • US Atlanta Fed GDPNow Q4 Forecast +5.4% +10.0 basis points
  • US 10-Year T-Note Yield 4.25% -4.0 basis points
  • 1-Year TIPS Spread 2.87 +6.0 basis points
  • Highest target rate probability for March 18th FOMC meeting: 82.2% (+3.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 68.6%(+2.8 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +616 open in Japan 
  • China A50 Futures: Indicating +27 open in China
  • DAX Futures: Indicating +400 open in Germany
Portfolio:
  • Higher: On gains in my tech/financial/industrial/consumer discretionary/biotech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure: Moved to 100% Net Long

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