Tuesday, August 25, 2026

Stocks Modestly Higher into Final Hour on Diminishing War-Induced Inflation Fears, Lower Long-Term Rates, Earnings Outlook Optimism, Tech/Biotech Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 50.4 -.4%
  • BofA Private Credit Proxy Index 74.0 -.1% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .29 unch.
  • BofA Global Financial Stress Indicator -.15 unch.
  • European Financial Sector CDS Index 53.4 -.8%
  • Emerging Market CDS Index 136.9 -1.2%
  • Israel Sovereign CDS 54.0 +.9%
  • Bloomberg Global Trade Policy Uncertainty Index 1.1 +.1
  • US Morning Consult Daily Consume Sentiment Index 91.6 +1.8
  • Citi US Economic Surprise Index 22.7 -1.3
  • Citi Eurozone Economic Surprise Index 90.8 +6.2
  • Citi Emerging Markets Economic Surprise Index 23.6 +1.9
  • S&P 500 Current Quarter EPS Growth Rate YoY(467 of 500 reporting) +49.6% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 391.92 +.20:  Growth Rate +33.1% unch., P/E 19.6 unch.
  • S&P 500 Current Year Estimated Profit Margin 16.32% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 953.28 +.53: Growth Rate +83.8% +.1 percentage point, P/E 19.3 +.1
  • Bloomberg US Financial Conditions Index 1.25 -6.0 basis points
  • US Yield Curve 44.0 basis points (2s/10s) -2.75 basis points
  • Bloomberg Industrial Metal Index 181.9 +1.0%
  • Dutch TTF Nat Gas(European benchmark) 66.7 euros/megawatt-hour -2.3%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.0 +.7% percentage point
  • US Atlanta Fed GDPNow Q3 Forecast +4.0% unch.
  • US 10-Year T-Note Yield 4.64% -6.0 basis points
  • 1-Year TIPS Spread 1.99 -1.0 basis point
  • Highest target rate probability for Oct. 28th FOMC meeting: 46.4% (+3.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Dec. 9th meeting: 45.3%(+.5 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +150 open in Japan 
  • China A50 Futures: Indicating +6 open in China
  • KOSPI 200 Futures: Indicating +13 open in South Korea 
  • DAX Futures: Indicating +40 open in Germany
Portfolio:
  • Slightly Higher: On gains in my financial/tech/biotech sector longs
  • Disclosed Trades: None
  • Market Exposure: 75% net long

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