Thursday, June 04, 2026

Stocks Reversing Higher into Final Hour on Mideast War Resolution Hopes, Lower Long-Term Rates, Sector Rotation, Financial/Healthcare Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 50.7 -1.2%
  • BofA Private Credit Proxy Index 72.3 +2.2% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .26 +1.0 basis point
  • BofA Global Financial Stress Indicator -.32 +2.0 basis points
  • European Financial Sector CDS Index 55.8 -1.3%
  • Emerging Market CDS Index 148.6 -1.5%
  • Israel Sovereign CDS 54.6 +.6% 
  • Bloomberg Global Trade Policy Uncertainty Index 1.0 +.3
  • US Morning Consult Daily Consume Sentiment Index 89.8 unch.
  • Citi US Economic Surprise Index 58.6 -3.5
  • Citi Eurozone Economic Surprise Index -43.90 +1.3
  • Citi Emerging Markets Economic Surprise Index 39.5 +2.5
  • S&P 500 Current Quarter EPS Growth Rate YoY(493 of 500 reporting) +28.0% +.4 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 362.25 +.53:  Growth Rate +23.2% unch., P/E 20.9 -.1
  • S&P 500 Current Year Estimated Profit Margin 15.47% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +66.6% -.8 percentage point
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 894.01 +3.22: Growth Rate +72.4% n/a, P/E 20.1 -.5 
  • Bloomberg US Financial Conditions Index 1.20 +1.0 basis point
  • US Yield Curve 42.5 basis points (2s/10s) +2.0 basis points
  • Bloomberg Industrial Metal Index 187.1 -.4%
  • Dutch TTF Nat Gas(European benchmark) 48.9 euros/megawatt-hour +.2%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.4% +1.1 percentage points
  • US Atlanta Fed GDPNow Q2 Forecast +3.0% unch.
  • US 10-Year T-Note Yield 4.47% -3.0 basis points
  • 1-Year TIPS Spread 2.71 -7.0 basis points
  • Highest target rate probability for July 29th FOMC meeting: 88.5% (+1.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 72.5%(+2.7 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +325 open in Japan 
  • China A50 Futures: Indicating -141 open in China
  • DAX Futures: Indicating +25 open in Germany
Portfolio:
  • Higher: On gains in my biotech/financial sector longs and emerging market shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 1000% Net Long

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