Tuesday, May 21, 2024

Stocks Reversing Higher into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Financial/Pharma Sector Strength

Economic Gauges:
  • S&P 500 Current Quarter EPS Growth Rate YoY(471 of 500 reporting) +5.1% -.2 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 256.21 +.30:  Growth Rate +14.9% +.1 percentage point, P/E 20.7 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.88% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +37.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 328.27 +.51: Growth Rate +36.6% +.2%, P/E 32.0 +.1
  • Bloomberg US Financial Conditions Index 1.16 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index .96 unch.
  • US Yield Curve -42.0 basis points (2s/10s) -1.25 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +3.6% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 48.1% -.1 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.37% -2.0 basis points
  • 10-Year TIPS Spread 2.34 unch.
  • Highest target rate probability for July 31st FOMC meeting: 76.4%(unch.) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 51.8%(+2.2 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -81 open in Japan 
  • China A50 Futures: Indicating -3 open in China
  • DAX Futures: Indicating +92 open in Germany
Portfolio:
  • Higher:  On gains in my financial/tech sector longs and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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