Thursday, August 21, 2025

Stocks Modestly Lower into Final Hour on Higher Long-Term Rates, Falling Fed Rate-Cut Odds, Earnings Outlook Jitters, Retail/Alt Energy Sector Weakness

Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.5 -.13%
  • US 10-Year T-Note Yield 4.33% +4.0 basis points
  • 3-Month T-Bill Yield 4.23% +2.0 basis points
  • China Iron Ore Spot 101.4 USD/Metric Tonne +.2%
  • Dutch TTF Nat Gas(European benchmark) 33.2 euros/megawatt-hour +4.0%
  • Citi US Economic Surprise Index 15.0 +10.9 points
  • Citi Eurozone Economic Surprise Index 37.9 +15.7 points
  • Citi Emerging Markets Economic Surprise Index -1.8 -.1 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(470 of 500 reporting) +11.0% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 288.27 +.18:  Growth Rate +12.9% +.1 percentage point, P/E 22.1 unch.
  • S&P 500 Current Year Estimated Profit Margin 13.43% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +23.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 470.61 +.48: Growth Rate +24.9% +.2 percentage point, P/E 31.7 -.1
  • Bloomberg US Financial Conditions Index .60 -2.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.18 +6.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 4.3 unch.
  • US Yield Curve 53.5 basis points (2s/10s) -1.5 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +2.3% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.2% +.1 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
  • 1-Year TIPS Spread 2.67 +4.0 basis points
  • 10-Year TIPS Spread 2.39 +4.0 basis points
  • Highest target rate probability for Oct. 29th FOMC meeting: 51.4% (+5.0 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 46.8%(+.5 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +50 open in Japan 
  • China A50 Futures: Indicating +35 open in China
  • DAX Futures: Indicating +10 open in Germany
Portfolio:
  • Slightly Lower: On losses in my consumer discretionary/tech/utility sector longs
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long

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