Ready for a 90’s party today? A little bit of Powell in my life, a little bit of wage growth by my side… a little bit of rate cuts is all I need… The US job growth exceeded all estimates last mo. Unemployment was down and wage growth accelerated. No wonder why Powell was tempering rate cut exp...
Read moreTomorrow, we get the JOBS report. Traders are waiting…in the meantime, we’re all watching Israel hitting Beirut, and what happens next (for humans, geopolitically, for oil, for markets, etc.) Shipping Investors are shipping on dockworkers and mgmt to come together to end the strike. We’re on...
Read moreGOOG supposedly is making progress on AI software that mimics the human ability to reason, like OpenAI’s o1. Also, ORCL expects to spend $6.5 bn building a cloud services center in Malaysia, including access to Nvidia chips that can be used to accelerate generative AI development. Plus, an MIT eco...
Read moreMake sure you get your necessities…because US dockworkers walked out of every major port on the East and Gulf coasts. JPM forecasts the economy could take a ~$3.8-$4.5bn hit per day because the strike will halt container cargo and auto shipments. It will be the first walkout by the International L...
Read moreBefore we get into the humor this morning…we send our positive thoughts to our friends on the East Coast as Hurricane Helene is hitting Georgia after Florida landfall with damaging winds, per Axios and FT. All Time All time, baby. All time highs. Purple Hat It’s a total dance party this morn...
Read morePowell made a power move in pushing for the 50 bps cut, with his officials were split on how fast to lower rates, per BBG. You’ll make it rain, but he’ll make it shower…who got the power? CA Love The West Coast is winning this week on several fronts…oh, the Diddler…and now the ports. The...
Read moreAnd I’m not just talking about the JetBlue charger thief (I side with the guy…). The swaps market is pricing in ~75 bps of Fed rate cuts over the last 2 meetings of 2024, per Bloomberg. Positioning figures show a big increase in open interest in 2-yr note futures plus a marked uptick in bets in ...
Read moreChina’s cutting rates too, and their central bank pumped out other stimulus measures on top. It cut the reserve requirement ratio, 7-day policy rate and existing mortgage rates. Also $113bn+ of liquidity support for equities. The stimulus could lift GDP growth by up to 1.1% over the NTM, per BBG. ...
Read moreHouse leaders unveiled a stopgap funding bill to keep the US gov open through Dec. 20 and avert an Oct. 1 shutdown. At least they’re thinking about their constituents…let us eat Bread. More Cowbell The Fed’s Bostic was out supporting their large rate cut, needed to support labor. Kashkari we...
Read moreFinancial analyst Charlie Peabody commented on LEN/Homebuilders this morning. His point is that these companies can either hit their unit sales goals + miss on gross margins, or vice versa. Why? Well, affordability remains the problem, and LEN hit the topline (delivery beat) but missed on gross marg...
Read moreFed rate cuts are underway, kicked off with a strong 50. Although the level of the US slowdown is still uncertain, and with defaults and bankruptcies still in watch, we’ll be keeping a close eye on growth and margins to see if we’re threading that needle for a Soft Landing. Bonds with duration f...
Read moreThat’s the odds we’re seeing anticipated today for a 25bps vs 50bps rate cut. Futures traders extended a record number of wagers riding on an outsized cut pre-decision today, so there could be some paw-licking if it’s just 25bps. Looking ahead, though, everyone is expecting a big party. Refin...
Read moreTomorrow we’ll learn if we get 25 or 50bps in rate cuts here in the US. On Thursday, the BoE will have to weigh the soft Jul GDP read with solid PMIs—so it’s either no cut or a small one. Duration Game As the US cuts rates, traders expect EM bonds to benefit. Debt in local FX should be the b...
Read moreTech is lower today (so far). Apple is hit after an analyst noted that demand for the iPhone 16 Pro series is lower than expected. But NVDA is allowed to rest a bit. It was up almost 16% last week. Big Week The Fed will announce the level of cuts on Wed. On Friday, we’ll know more from the BoJ. ...
Read more... That is the question... Everyone has an opinion about the Fed’s decision next week to go for a 25bps vs 50bps cut at next week's meeting, per the FT. This morning the market is pricing in a 40% chance of a 50. One imaginary vote comes from Former NY Fed President Dudley who said he sees a stro...
Read moreJPM notes that "We have been noting a choppy trading environment for a while. For context, Markets traded Goldilocks in last week of August but switched to Hard Landing in the first week of September. Yesterday, for a few hours only, High for Long ('H4L') was back but eventually US Tech strength inc...
Read moreETF inflows can taste the love. Global inflows will be at all-time-highs this year, per the FT. Blinding Lights Is the market seeing blinding lights, pricing in the risk of inflation slowing too much? The UST-10yr breakeven rate fell to its lowest level since 2021, per BBG. Traders are holding fir...
Read moreApple and Google lost landmark EZ decisions per the EZ’s crackdown on tech co’s. Apple was fighting a €13 bn Irish tax bill, while Google was trying to fight a €2.4 bn antitrust fine. Capital Letters A big THANK YOU in capital letters from big banks to US regulators, who scaled back a prop...
Read more