Wednesday, June 17, 2026

Stocks Reversing Lower into Final Hour on More Hawkish FOMC Commentary, Higher Long-Term Rates, Technical Selling, Consumer Discretionary/Regional Bank Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 50.5 +.4%
  • BofA Private Credit Proxy Index 69.0 -1.8% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .23 -1.0 basis point
  • BofA Global Financial Stress Indicator -.27 -4.0 basis points
  • European Financial Sector CDS Index 54.4 +.6%
  • Emerging Market CDS Index 141.9 -.3%
  • Israel Sovereign CDS 51.6 +3.8% 
  • Bloomberg Global Trade Policy Uncertainty Index .4 unch.
  • US Morning Consult Daily Consume Sentiment Index 90.2 unch.
  • Citi US Economic Surprise Index 49.7 +1.7
  • Citi Eurozone Economic Surprise Index -26.8 +4.1
  • Citi Emerging Markets Economic Surprise Index 39.4 +.7
  • S&P 500 Current Quarter EPS Growth Rate YoY(4 of 500 reporting) +18.8% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 365.28 +.14:  Growth Rate +24.2% +.1 percentage point, P/E 20.6 -.1
  • S&P 500 Current Year Estimated Profit Margin 15.52% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 919.15 +.61: Growth Rate +77.2% +.1 percentage point, P/E 18.9 unch. 
  • Bloomberg US Financial Conditions Index 1.15 -4.0 basis points
  • US Yield Curve 28.5 basis points (2s/10s) -9.25 basis points
  • Bloomberg Industrial Metal Index 182.0 +.3%
  • Dutch TTF Nat Gas(European benchmark) 41.60 euros/megawatt-hour -.4%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.8% -.2 percentage point
  • US Atlanta Fed GDPNow Q2 Forecast +3.0% +.2 percentage point
  • US 10-Year T-Note Yield 4.48% +4.0 basis points
  • 1-Year TIPS Spread 1.98 -6.0 basis points
  • Highest target rate probability for July 29th FOMC meeting: 61.0% (-29.0 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 47.0%(+19.8 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +400 open in Japan 
  • China A50 Futures: Indicating -195 open in China
  • DAX Futures: Indicating -70 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/biotech sector longs, index hedges and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long

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