The Surge in Earnings is Supporting Equity Valuations.
From the Trading Desk at Stipelis:
The Macro View-Global Market Moves across Asset Classes
11-3-2025
The global macro landscape is shifting as the Federal Reserve prepares to end quantitative tightening (QT) on December 1—months earlier than expected. This move, combined with the recent quarter-point rate cut, signals a softer policy stance and injects liquidity back into the financial system. By reinvesting proceeds from maturing Treasurys into short-term bills, the Fed reduces pressure on private markets to absorb government debt, freeing capital for equities and risk assets.
Meanwhile, the U.S. Dollar Index edged up to 99.76 (+0.13%), reinforcing its inverse relationship with commodities. Historically, a rising dollar is bearish for commodities, while falling bond prices and rising interest rates tend to align with commodity strength. Current data shows the Stipelis Commodity Index up 0.35% (YTD +5.67%), energy leading with a 1.24% daily gain, and metals slightly weaker (-0.60%). Bonds slipped (-0.28%), consistent with higher rates and commodity resilience.
Equities remain buoyant despite valuation concerns, with the S&P 500 trading at 23x forward earnings versus a 10-year average of 18.6. Strong corporate earnings growth—11% in Q3—supports this optimism.
However, risks persist: slower Fed cuts, weak market breadth, and stress in short-term funding markets.
As For the Stipelis Commodity Index, the technical picture shows bullish bias above the Bollinger Moving Average, The Relative Strength Index is at 62.7, and Stochastics at 77.4—neutral but leaning overbought.
ADX at 18 signals a weak trend, limiting breakout potential. Expect a range of 1.010–1.030, with resistance at 1.030 and support at 1.010.
Bottom line: Liquidity injections, dollar dynamics, and earnings strength favor risk assets into year-end, but watch funding markets and Fed signals closely.
Stephen Coleman
Stipelis Global Trading LLC is registered with the Commodity Futures Trading Commission and is a member of the National Futures Association. Member ID 0474441
The opinions expressed are those of Stipelis Global Trading LLC and are considered market commentary. They are not intended to act as investment recommendations. Individuals should make investment decisions based on their own analysis and with direct consultation with a financial advisor.
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