Monday, August 10, 2026

Stocks Reversing Slightly Lower into Final Hour on Mideast War Escalation Fears, War-Induced Inflation Worries, Technical Selling, Consumer Discretionary/Utility Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 51.7 +1.7%
  • BofA Private Credit Proxy Index 73.4 -1.4% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .28 unch.
  • BofA Global Financial Stress Indicator -.19 -4.0 basis points
  • European Financial Sector CDS Index 53.9 +.6%
  • Emerging Market CDS Index 141.4 +.5%
  • Israel Sovereign CDS 55.6 +.9%
  • Bloomberg Global Trade Policy Uncertainty Index .9 +.1
  • US Morning Consult Daily Consume Sentiment Index 89.0 -.3
  • Citi US Economic Surprise Index 27.2 -2.3
  • Citi Eurozone Economic Surprise Index 68.2 +.3
  • Citi Emerging Markets Economic Surprise Index 23.8 +.2
  • S&P 500 Current Quarter EPS Growth Rate YoY(444 of 500 reporting) +50.7% -1.3 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 388.14 +1.69:  Growth Rate +31.9% +.5 percentage point, P/E 20.0 +.1
  • S&P 500 Current Year Estimated Profit Margin 16.23% +6.0 basis  points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 944.03 +3.63: Growth Rate +82.0% +.7 percentage point, P/E 20. +.4
  • Bloomberg US Financial Conditions Index 1.33 +9.0 basis points
  • US Yield Curve 46.0 basis points (2s/10s) +3.5 basis points
  • Bloomberg Industrial Metal Index 180.4 +.6%
  • Dutch TTF Nat Gas(European benchmark) 61.7 euros/megawatt-hour +11.1%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.0% -1.0 percentage point
  • US Atlanta Fed GDPNow Q3 Forecast +5.8% unch.
  • US 10-Year T-Note Yield 4.70% +6.0 basis points
  • 1-Year TIPS Spread 1.76 +8.0 basis points
  • Highest target rate probability for Oct. 28th FOMC meeting: 50.7% (+3.3 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 43.2%(-1.3 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -110 open in Japan 
  • China A50 Futures: Indicating -68 open in China
  • KOSPI 200 Futures: Indicating +1 open in South Korea 
  • DAX Futures: Indicating +90 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges, took profits in transport longs and added energy longs
  • Market Exposure: Moved to 75% net long

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