Thursday, May 07, 2026

Stocks Reversing Lower into Final Hour on Global Supply Chain Disruption Fears, Higher Long-Term Rates, Profit-Taking, Tech/Construction Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 53.3 +1.2%
  • BofA Private Credit Proxy Index 76.6 -.9% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .22 -2.0 basis points
  • BofA Global Financial Stress Indicator -.09 -6.0 basis points
  • European Financial Sector CDS Index 59.2 +.8%
  • Emerging Market CDS Index 157.0 +1.4%
  • Israel Sovereign CDS 62.3 -.3% 
  • Bloomberg Global Trade Policy Uncertainty Index .9 unch.
  • US Morning Consult Daily Consume Sentiment Index 88.3 +.9
  • Citi US Economic Surprise Index 34.7 +1.7
  • Citi Eurozone Economic Surprise Index -57.0 +5.8
  • Citi Emerging Markets Economic Surprise Index 53.2 +2.8
  • S&P 500 Current Quarter EPS Growth Rate YoY(423 of 500 reporting) +25.5% -.2 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 352.15 +.74:  Growth Rate +27.1% +.3 percentage point, P/E 20.9 unch.
  • S&P 500 Current Year Estimated Profit Margin 15.36% +3.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +62.1% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 850.43 +1.77: Growth Rate +114.8% +.4 percentage point, P/E 19.9 +.1 
  • Bloomberg US Financial Conditions Index 1.03 +3.0 basis points
  • US Yield Curve 47.5 basis points (2s/10s) -1.0 basis point
  • Bloomberg Industrial Metal Index 180.1 -.1%
  • Dutch TTF Nat Gas(European benchmark) 44.1 euros/megawatt-hour +.4% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 17.8% unch.
  • US Atlanta Fed GDPNow Q2 Forecast +3.7% unch.
  • US 10-Year T-Note Yield 4.39% +4.0 basis points
  • 1-Year TIPS Spread 3.0 -5.0 basis points
  • Highest target rate probability for July 29th FOMC meeting: 90.7% (+4.2 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 90.0%(+6.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -499 open in Japan 
  • China A50 Futures: Indicating -157 open in China
  • DAX Futures: Indicating -88 open in Germany
Portfolio:
  • Slightly Lower: On losses in my tech/biotech/industrial/consumer discretionary/energy sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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