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Your Quiver | Wednesday, July 3, 2024

CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.

Treasuring the Softness

US continuing jobless claims increased for a ninth straight week. Treasury yields dropped on the news as data showing further weakness in the US labor market further reinforces the case for the Fed to cut interest rates this year.

Softness Continued

While stocks rose and bond yields fell on the start of the day, further data showed that the US services sector contracted in June at the fastest pace in four years due to a sharp pullback in business activity and declining orders. Further bolstering bets that the Fed can cut sooner rather than later.

That's My Fishing Spot

Chinese coast guard took control of a Taiwan fishing boat further inflaming tensions between the two countries as Beijing has been stepping up pressure on Taiwan's new leader. While incidents like this have occurred occasionally in the past, we think it is something to keep an eye on.

Dancing

Paramount Global's shares jumped (up +9% at the time of writing this) the most in two months after a merger deal with independent film and TV producer Skydance Media was brought back to life.

Electrocuted

Woes in the electric vehicle industry are spreading into the debt market, where falling values for used cars are causing challenges that could make it harder for customers to get loans. The plummeting resale value of EV's is making asset backed securities riskier which could increase the cost of debt that consumers pay.

Betting on Trump

The WSJ highlights that the Treasury market has sold off following last week’s debate. The Journal notes that “The increasing likelihood of a second Trump administration has helped spark a steep selloff in U.S. government bonds, with investors betting policies including tax cuts could drive up deficits and inflation.” For its part, Bloomberg shows that political betting markets continue to price-in ever lower odds of a Biden re-election. Get your popcorn.

On the Road Again

Reuters notes that AAA expects a record of almost 71 million people to travel around the U.S. for the Independence Day holiday. Over 60 million people are expected to drive, while 6 million will fly, and rest will take trains or busses.