Wednesday, May 20, 2026

Stocks Rising into Final Hour on Mideast War Resolution Hopes, Plunging Long-Term Rates, Earnings Outlook Optimism, Transport/Alt Energy Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 53.2 -2.5%
  • BofA Private Credit Proxy Index 71.9 +1.1% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .32 +3.0 basis points
  • BofA Global Financial Stress Indicator -.12 -2.0 basis points
  • European Financial Sector CDS Index 59.0 -3.2%
  • Emerging Market CDS Index 159.4 -1.6%
  • Israel Sovereign CDS 62.0 -2.1% 
  • Bloomberg Global Trade Policy Uncertainty Index .7 unch.
  • US Morning Consult Daily Consume Sentiment Index 88.9 -.5
  • Citi US Economic Surprise Index 47.6 +2.3
  • Citi Eurozone Economic Surprise Index -52.7 -.5
  • Citi Emerging Markets Economic Surprise Index 35.2 +3.1
  • S&P 500 Current Quarter EPS Growth Rate YoY(460 of 500 reporting) +24.9% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 356.0 +.36:  Growth Rate +28.5% +.2 percentage point, P/E 20.9 +.2
  • S&P 500 Current Year Estimated Profit Margin 15.39% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +62.1% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 869.06 +3.25: Growth Rate +119.5% +.8 percentage point, P/E 19.7 +.1 
  • Bloomberg US Financial Conditions Index 1.00 +2.0 basis points
  • US Yield Curve 53.0 basis points (2s/10s) -1.75 basis points
  • Bloomberg Industrial Metal Index 184.1 +1.3%
  • Dutch TTF Nat Gas(European benchmark) 48.9 euros/megawatt-hour -5.7%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.2% -.8 percentage point
  • US Atlanta Fed GDPNow Q2 Forecast +4.0% unch.
  • US 10-Year T-Note Yield 4.56% -10.0 basis points
  • 1-Year TIPS Spread 2.93 -14.0 basis points
  • Highest target rate probability for July 29th FOMC meeting: 86.8% (+2.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 74.4%(+7.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +1,640 open in Japan 
  • China A50 Futures: Indicating -27 open in China
  • DAX Futures: Indicating +70 open in Germany
Portfolio:
  • Higher: On gains in my biotech/consumer discretionary/industrial/tech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
  • Market Exposure: Moved to 75% Net Long

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