Wednesday, July 01, 2026

Stocks Reversing Slightly Higher into Afternoon on Positive Earnings Outlook Revisions, Sector Rotation, Crypto Bounce, Healthcare/Financial Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 50.6 -.7%
  • BofA Private Credit Proxy Index 70.6 +1.1% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 +2.0 basis points
  • BofA Global Financial Stress Indicator -.24 -5.0 basis points
  • European Financial Sector CDS Index 54.3 -.2%
  • Emerging Market CDS Index 141.3 +.6%
  • Israel Sovereign CDS 56.6 +4.3% 
  • Bloomberg Global Trade Policy Uncertainty Index .5 unch.
  • US Morning Consult Daily Consume Sentiment Index 92.4 +2.1
  • Citi US Economic Surprise Index 51.5 -8.0
  • Citi Eurozone Economic Surprise Index -20.4 -2.5
  • Citi Emerging Markets Economic Surprise Index 36.0 +3.6
  • S&P 500 Current Quarter EPS Growth Rate YoY(15 of 500 reporting) +174.4% -14.4 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 371.58 +.07:  Growth Rate +26.3% unch., P/E 20.2 unch.
  • S&P 500 Current Year Estimated Profit Margin 15.62% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +1,226.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 894.93 +.62: Growth Rate +72.6% +.1 percentage point, P/E 19.2 +.3 
  • Bloomberg US Financial Conditions Index 1.24 +15.0 basis points
  • US Yield Curve 31.0 basis points (2s/10s) +3.0 basis points
  • Bloomberg Industrial Metal Index 169.67 -.8%
  • Dutch TTF Nat Gas(European benchmark) 43.1 euros/megawatt-hour -.9%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.0% -1.4 percentage points
  • US Atlanta Fed GDPNow Q2 Forecast +1.2% -1.3 percentage points
  • US 10-Year T-Note Yield 4.47% +1.0 basis point
  • 1-Year TIPS Spread 1.43 +1.0 basis point
  • Highest target rate probability for September 29th FOMC meeting: 50.7% (+.1 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 47.0%(+.5 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -570 open in Japan 
  • China A50 Futures: Indicating -207 open in China
  • KOSPI 200 Futures: Indicating -36 open in South Korea 
  • DAX Futures: Indicating +160 open in Germany
Portfolio:
  • Slightly Higher: On gains in my financial/consumer discretionary sector longs, index hedges and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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