BETWEEN THE HEDGES

Thursday, August 28, 2025

Stocks Reversing Higher into Final Hour on Falling Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Tech/Alt Energy Sector Strength

Posted by Gary .....at 3:20 PM

Economic Gauges:

Bloomberg Emerging Markets Currency Index 36.53 +.13%
US 10-Year T-Note Yield 4.21% -3.0 basis points
3-Month T-Bill Yield 4.17% unch.

China Iron Ore Spot 103.6 USD/Metric Tonne -.6%
Dutch TTF Nat Gas(European benchmark) 31.6 euros/megawatt-hour -3.1%

Citi US Economic Surprise Index 26.8 +3.1 points

Citi Eurozone Economic Surprise Index 25.6 -3.9 points

Citi Emerging Markets Economic Surprise Index 1.3 +2.7 points
S&P 500 Current Quarter EPS Growth Rate YoY(486 of 500 reporting) +12.4% +1.5 percentage points
S&P 500 Blended Forward 12 Months Mean EPS Estimate 289.22 +.16: Growth Rate +10.4% -2.9 percentage points, P/E 22.4 unch.
S&P 500 Current Year Estimated Profit Margin 13.43% -1.0 basis point
NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +27.9% +4.3 percentage points
NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 473.36 +.48: Growth Rate +15.8% -10.7 percentage points, P/E 32.7 +.3
Bloomberg US Financial Conditions Index .65 -2.0 basis points
Bloomberg Euro-Zone Financial Conditions Index 1.41 -15.0 basis points
Bloomberg Global Trade Policy Uncertainty Index 4.3 +.2
US Yield Curve 57.0 basis points (2s/10s) -4.25 basis points
US Atlanta Fed GDPNow Q2 Forecast +2.2% unch.
US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 45.4% +1.4 percentage points

Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
1-Year TIPS Spread 2.78 -1.0 basis point
10-Year TIPS Spread 2.42 -2.0 basis points
Highest target rate probability for Oct. 29th FOMC meeting: 48.3% (-.7 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 47.7%(-.8 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)

Overseas Futures:

Nikkei 225 Futures: Indicating +120 open in Japan
China A50 Futures: Indicating -11 open in China

DAX Futures: Indicating +70 open in Germany

Portfolio:

Higher: On gains in my tech/financial/utility/industrial sector longs
Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
Market Exposure: Moved to 100% Net Long

Bear Radar

Posted by Gary .....at 2:37 PM

Style Underperformer:

Small-Cap Value -.4%

Sector Underperformers:

1) Retail -1.0% 2) Pharma -.7% 3) Medical Equipment -.7%

Stocks Falling on Unusual Volume:

DCI, VSCO, SN, BBY, TD, QGEN, DKS, FL, SBH, NTNX, VEEV, BBWI, URBN, COO, DOMO, HMY, HRL and ARX

Stocks With Unusual Put Option Activity:

1) OPAD 2) WEN 3) MLTX 4) SILJ 5) SNOW

Stocks With Most Negative News Mentions:

1) HRL 2) COO 3) SN 4) CHTR 5) CNC

Sector ETFs With Most Negative Money Flow:

1) VGT 2) VOX 3) SOXX 4) VCR 5) XLC

Charts:

Bull Radar

Posted by Gary .....at 1:51 PM

Style Outperformer:

Mid-Cap Growth +1.1%

Sector Outperformers:

1) Computer Hardware +3.7% 2) AI/Innovation +3.0% 3) Nuclear +2.1%

Stocks Rising on Unusual Volume:

PSTG, SNOW, PAHC, BILL, BBW, TCOM, RGTI, AEHR, VEON, DFDV, CPRE, TIGR, XP, TIGR, SMWB, CEPU, PGY, BURL, MDB, LITE, RMBS, LEU, OPRX, CRWV, BE, OKLO, KC, FN, DDOG, ASPI, UPST, TVTX, IREN, APP, GTLB, CFLT, MNDY, ATAT, GDS, TGS, FIVE, KYIV, NOW, PAM, BMA, ESTC, LI, ALGM, BBAR, AEVA, A, STVN, AFRM, TSEM, YPF, SKYT, MTSR, VKTX and MGNI

Stocks With Unusual Call Option Activity:

1) GTES 2) ESTC 3) PBR/A 4) WYNN 5) PSTG

Stocks With Most Positive News Mentions:

1) SNOW 2) PSTG 3) PAHC 4) CELC 5) BBW

Sector ETFs With Most Positive Money Flow:

1) XLF 2) GDX 3) FDN 4) ITA 5) XLY

Charts:

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Posted by Gary .....at 11:41 AM

Earnings of Note
Company/Estimate

Before the Open:

(BABA)/14.16
(FRO)/.44

After the Close:

None of note

Economic Releases

8:30 am EST

Personal Income for July is estimated to rise +.4% versus a +.3% gain in June.
Personal Spending for July is estimated to rise +.5% versus a +.3% gain in June.
The PCE Core MoM for July is estimated to rise +.3% versus a +.3% gain in June.
Advance Goods Trade Balance for July is estimated at -$90.0B versus -$86.0B in June
Wholesale Inventories for July is estimated to rise +.2% versus a +.1% gain in June.
Retail Inventories MoM for July is estimated to rise +.2% versus a +.1% gain in June.

9:45 am EST

MNI Chicago PMI for Aug. is estimated to fall to 46.5 versus 47.1 in July.

10:00 am EST

Final Univ. of Mich. Consumer Confidence readings for Aug.

11:00 am EST

The Kansas City Fed Services Activity Index for Aug.

Upcoming Splits

None of note

Other Potential Market Movers

The Atlanta Fed GDPNow Q3 update, Bloomberg US Economic Survey for Aug., weekly US Baker Hughes oil rig count, weekly CFTC speculative net positioning reports and the Dallas Fed PCE for July could also impact global trading tomorrow.

US Equity Market Hours

9:30 am - 4:00 pm EST

Wednesday, August 27, 2025

Thursday Watch

Posted by Gary .....at 10:15 PM

Night Trading

Asian equity indices are -.5% to +.25% on average.
Asia Ex-Japan Investment Grade CDS Index 66.5 +1.0 basis point.
China Sovereign CDS 44.0 +1.5 basis points.
China Iron Ore Spot 103.0 USD/Metric Tonne +.44%.
Swiss Franc/Offshore Chinese Renminbi Cross 8.92 +.1%.
Bloomberg Emerging Markets Currency Index 36.50 +.02%.
Bloomberg Global Risk-On/Risk Off Index 81.4 -.3%.
US 10-Year Yield 4.23% -1.0 basis point.
Volatility Index(VIX) futures 17.0 +.3%.
Euro Stoxx 50 futures +.13%.
S&P 500 futures -.15%.
NASDAQ 100 futures -.34%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Tech/Energy Sector Strength

Posted by Gary .....at 3:16 PM