Tuesday, May 26, 2026

Stocks Rising into Final Hour on Mideast War Resolution Hopes, Lower Long-Term Rates, Earnings Outlook Optimism, Tech/Transport Sector Strength

Economic/Market Gauges:

  • North American Investment Grade CDS Index 51.9 -.8%
  • BofA Private Credit Proxy Index 71.8 +1.2% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .25 -3.0 basis points
  • BofA Global Financial Stress Indicator -.22 -8.0 basis points
  • European Financial Sector CDS Index 56.6 -1.9%
  • Emerging Market CDS Index 156.5 -.6%
  • Israel Sovereign CDS 57.7 -3.3% 
  • Bloomberg Global Trade Policy Uncertainty Index .7 +.1
  • US Morning Consult Daily Consume Sentiment Index 87.2 +.1
  • Citi US Economic Surprise Index 43.7 -4.3
  • Citi Eurozone Economic Surprise Index -73.7 +8.7
  • Citi Emerging Markets Economic Surprise Index 33.8 -.6
  • S&P 500 Current Quarter EPS Growth Rate YoY(473 of 500 reporting) +27.5% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 358.83 +2.40:  Growth Rate +22.3% +.8 percentage point, P/E 20.9 +.1
  • S&P 500 Current Year Estimated Profit Margin 15.44% +4.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +67.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 877.0 +6.99: Growth Rate +121.5% +1.8 percentage points, P/E 20.1 +.3 
  • Bloomberg US Financial Conditions Index 1.02 +3.0 basis points
  • US Yield Curve 44.5 basis points (2s/10s) -4.5 basis points
  • Bloomberg Industrial Metal Index 185.68 +.3%
  • Dutch TTF Nat Gas(European benchmark) 46.9 euros/megawatt-hour +3.2%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 12.8% +1.4 percentage points
  • US Atlanta Fed GDPNow Q2 Forecast +4.3% unch.
  • US 10-Year T-Note Yield 4.49% -6.0 basis points
  • 1-Year TIPS Spread 2.65 -7.0 basis points
  • Highest target rate probability for July 29th FOMC meeting: 88.6% (+7.0 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 72.0%(+11.7 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +570 open in Japan 
  • China A50 Futures: Indicating -119 open in China
  • DAX Futures: Indicating +80 open in Germany
Portfolio:
  • Higher: On gains in my biotech/consumer discretionary/industrial/tech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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