Monday, September 08, 2025

Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Rising Fed Rate-Cut Odds, Tech/Road & Rail Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Lower
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 15.3 +.5%
  • S&P 500 Intraday % Swing .32 -76.5%
  • Bloomberg Global Risk On/Risk Off Index 79.7 -1.2% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.97 +.47%
  • Euro/Yen Carry Return Index 195.79 +.4%
  • Emerging Markets Currency Volatility(VXY) 7.03 -.42%
  • CBOE S&P 500 Implied Correlation Index 15.4 -2.5% 
  • ISE Sentiment Index 167.0 +23.0
  • Total Put/Call .79 +9.7%
  • NYSE Arms 1.37 +1.5%
  • NYSE Non-Block Money Flow -$51.0M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 49.9 +.08%
  • US Energy High-Yield OAS 361.4 -4.9%
  • Bloomberg TRACE # Distressed Bonds Traded 193.0 -7.0
  • European Financial Sector CDS Index 57.0 -1.4%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 126.0 -.3%
  • Italian/German 10Y Yld Spread 83.0 -4.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 63.08 -.5%
  • Emerging Market CDS Index 145.6 +1.2%
  • Israel Sovereign CDS 73.7 +.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.4 +.06%
  • 2-Year SOFR Swap Spread -23.75 basis points -.75 basis point
  • 3M T-Bill Treasury Repo Spread -38.25 basis points +1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap .75 unch.
  • MBS  5/10 Treasury Spread 125.0 -7.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 583.0 +3.0 basis points
  • Avg. Auto ABS OAS 49.0 -2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.49 +.08%
  • US 10-Year T-Note Yield 4.04% -3.0 basis points
  • 3-Month T-Bill Yield 4.02% +2.0 basis points
  • China Iron Ore Spot 105.7 USD/Metric Tonne +.3%
  • Dutch TTF Nat Gas(European benchmark) 33.1 euros/megawatt-hour +3.4%
  • Citi US Economic Surprise Index 21.8 +1.7 points
  • Citi Eurozone Economic Surprise Index 17.8 -2.3 points
  • Citi Emerging Markets Economic Surprise Index 11.8 -.1 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) +12.6% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 290.25 +1.28:  Growth Rate +11.3% +.5 percentage point, P/E 22.3 -.1
  • S&P 500 Current Year Estimated Profit Margin 13.49% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +28.4% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 483.83 +7.03: Growth Rate +18.3% +1.7 percentage points, P/E 32.9 +.2
  • Bloomberg US Financial Conditions Index .60 -1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index 1.47 +4.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 3.2 -.3
  • US Yield Curve 54.75 basis points (2s/10s) -3.75 basis points
  • US Atlanta Fed GDPNow Q2 Forecast +3.0% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.1% -.9 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.95% unch.: CPI YoY +2.84% unch.
  • 1-Year TIPS Spread 2.65 +3.0 basis points
  • 10-Year TIPS Spread 2.36 unch.
  • Highest target rate probability for Oct. 29th FOMC meeting: 73.9% (+2.9 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 10th meeting: 67.9%(+2.6 percentage points) chance of 3.5%-3.75%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +220 open in Japan 
  • China A50 Futures: Indicating +6 open in China
  • DAX Futures: Indicating +2 open in Germany
Portfolio:
  • Slightly Higher: On gains in my industrial/financial/tech sector longs
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

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