Thursday, August 06, 2026

Stocks Reversing Slightly Lower into Final Hour on Mideast War Resumption Fears, War-Induced Inflation Worries, Profit-Taking, Financial/Consumer Discretionary Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 51.0 -.1%
  • BofA Private Credit Proxy Index 73.1 +4.1% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .28 unch.
  • BofA Global Financial Stress Indicator -.17 -3.0 basis points
  • European Financial Sector CDS Index 53.6 +.2%
  • Emerging Market CDS Index 141.4 +.5%
  • Israel Sovereign CDS 57.1 unch.
  • Bloomberg Global Trade Policy Uncertainty Index .7 +.1
  • US Morning Consult Daily Consume Sentiment Index 92.7 +.4
  • Citi US Economic Surprise Index 35.1 +1.6
  • Citi Eurozone Economic Surprise Index 68.3 +2.0
  • Citi Emerging Markets Economic Surprise Index 25.5 +.1
  • S&P 500 Current Quarter EPS Growth Rate YoY(428 of 500 reporting) +52.0% +.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 386.45 +.80:  Growth Rate +31.4% +.3 percentage point, P/E 19.9 -.2
  • S&P 500 Current Year Estimated Profit Margin 16.17% -2.0 basis  points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 940.40 +1.32: Growth Rate +81.3% unch., P/E 19.6 unch.
  • Bloomberg US Financial Conditions Index 1.24 +.0 basis points
  • US Yield Curve 42.5 basis points (2s/10s) -1.0 basis point
  • Bloomberg Industrial Metal Index 180.6 -.1%
  • Dutch TTF Nat Gas(European benchmark) 58.0 euros/megawatt-hour +10.6%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.0% +.1 percentage point
  • US Atlanta Fed GDPNow Q3 Forecast +5.8% -.1 percentage point
  • US 10-Year T-Note Yield 4.66% +5.0 basis points
  • 1-Year TIPS Spread 1.65 +5.0 basis points
  • Highest target rate probability for Oct. 28th FOMC meeting: 52.8% (+.7 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 42.3%(-2.2 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +220 open in Japan 
  • China A50 Futures: Indicating -18 open in China
  • KOSPI 200 Futures: Indicating +16 open in South Korea 
  • DAX Futures: Indicating +125 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% net long

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