Wednesday, May 06, 2026

Stocks Surging into Final Hour on Mideast War Resolution Hopes, Earnings Outlook Optimism, Falling Long-Term Rates, Tech/Transport Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 52.6 -2.5%
  • BofA Private Credit Proxy Index 77.1 -1.5% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .24 -1.0 basis point
  • BofA Global Financial Stress Indicator -.03 -4.0 basis points
  • European Financial Sector CDS Index 58.7 -3.8%
  • Emerging Market CDS Index 154.8 -3.7%
  • Israel Sovereign CDS 63.4 -4.6% 
  • Bloomberg Global Trade Policy Uncertainty Index .9 unch.
  • US Morning Consult Daily Consume Sentiment Index 87.4 +.1
  • Citi US Economic Surprise Index 33.0 -.9
  • Citi Eurozone Economic Surprise Index -62.8 +1.1
  • Citi Emerging Markets Economic Surprise Index 50.4 +.4
  • S&P 500 Current Quarter EPS Growth Rate YoY(391 of 500 reporting) +25.7% -1.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 351.41 +1.15:  Growth Rate +26.8% +.4 percentage point, P/E 20.9 +.2
  • S&P 500 Current Year Estimated Profit Margin 15.33% +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 848.66 +4.42: Growth Rate +114.4% +1.2 percentage points, P/E 19.8 +.1 
  • Bloomberg US Financial Conditions Index 1.00 +7.0 basis points
  • US Yield Curve 48.5 basis points (2s/10s) +.75 basis point
  • Bloomberg Industrial Metal Index 180.3 +.5%
  • Dutch TTF Nat Gas(European benchmark) 43.7 euros/megawatt-hour -6.9% 
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 17.8% +1.3 percentage points
  • US Atlanta Fed GDPNow Q2 Forecast +3.7% unch.
  • US 10-Year T-Note Yield 4.35% -8.0 basis points
  • 1-Year TIPS Spread 3.05 -18.0 basis points
  • Highest target rate probability for July 29th FOMC meeting: 86.0% (-2.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 83.6%(-3.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +2,552 open in Japan 
  • China A50 Futures: Indicating +54 open in China
  • DAX Futures: Indicating +131 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech/industrial/consumer discretionary sector longs
  • Disclosed Trades: None 
  • Market Exposure: 100% Net Long

No comments: