CPI day in 'merica. U.S. yields relatively flat at the open, 2Y at 4.80% and 10Y at 4.00%. While today's CPI will look backwards, markets are paying attention to the re-acceleration in commodity prices with crude up around ~$84/bbl (it was under $70 to start July). There's a headline about olive oil prices rising due to droughts in Spain and the Bloomberg Pizza Index (not a joke) being up 13.5% YTD. Elsewhere, to our South, an Ecuadorian presidential candidate was assassinated by a drug cartel. We've got the Maui wildfires (crazy images). We have China dealing with property defaults and Biden signing an order to restrict US investment in Chinese tech (haven't we seen that before?).
On the day ahead it's CPI, Jobless Claims, 30Y Auction and Fedspeak
TTOD: a lot easier to get at using housing policy than interest rate policy. Housing inflation rose because rents rose, so the Fed hiked, so we slowed the rate of...building more units to rent...to slow inflation. "The price of this rose so we're going to make it more expensive to produce by raising funding costs" is not an unfair way to describe the strategy here. The hope on the Fed's part is that enough people feel broke enough to slow the rental market, not to let the supply side work
TTOD: You ever notice the people betting on higher interest rates are super angry?
TTOD: If you want to talk, don’t be a coward and lie about someone speaking in the audience—show up at the debate and say it to my face. I’ll be there…waiting for you.
TTOD: Michael Lorenzen throws the 14th no-hitter in Phillies history. His family's reaction is everything.
TTOD: Today the U.S. can produce around 30,000 artillery shells a month. In 1995 the army could produce 867,000 shells a month
TTOD: Salary envy among tech workers when they heard about UPS drivers getting $170,000 per year. Some tech workers on social media pointed out the salary boost could make the drivers' salaries more competitive with white collar employees — and big tech workers responded with a mix of ire and appreciation for the union.
"This is disappointing, how is possible that a driver makes much more than average Engineer in R&D?" a worker at the autonomous trucking company TuSimple wrote on Blind, an anonymous jop-posting site that verifies users' employment using their company email. "To get a base salary of $170k you know you need to work hard as an Engineer, this sucks."
TTOD: I will not relent. We are on the verge of a global margin call. A credit event is coming. No one is prepared.
TTOD: Eugenics will be the single greatest moral danger and threat to humanity in the 21st century. People are talking about it without even knowing that they're talking about it—and that, to me, is the most worrying sign.
Citations to TTOD quotes (in order):
@vebaccount (Alex Williams), "But the thing is, this is a big chunk of measured inflation that is a lot easier to get at using housing policy than interest rate policy. Housing inflation rose because rents rose, so the Fed hiked, so we slowed the rate of...building more units to rent...to slow inflation. "The price of this rose so we're going to make it more expensive to produce by raising funding costs" is not an unfair way to describe the strategy here. The hope on the Fed's part is that enough people feel broke enough to slow the rental market, not to let the supply side work." Twitter, 9 Aug 2023, https://twitter.com/vebaccount/status/1689335558252777472?s=20
@dailydirtnap (Jared Dillian), "You ever notice the people betting on higher interest rates are super angry?", Twitter, 9 Aug 2023, https://twitter.com/dailydirtnap/status/1689414607792652288?s=20
@GovChristie (Chris Christie), "Another day another lie from Donald Trump after getting called out for being an utter disgrace. If you want to talk, don’t be a coward and lie about someone speaking in the audience—show up at the debate and say it to my face. I’ll be there…waiting for you. Twitter, 9 Aug 2023, https://twitter.com/GovChristie/status/1689362372010381313?s=20
@MLB, "Michael Lorenzen throws the 14th no-hitter in Phillies history. His family's reaction is everything." Twitter, 9 Aug 2023, https://twitter.com/MLB/status/1689441778015891456?s=20
@matthewstoller (Matt Stoler), "Today the U.S. can produce around 30,000 artillery shells a month. In 1995 the army could produce 867,000 shells a month. https://gao.gov/assets/nsiad-95-89.pdf" Twitter, 9 Aug 2023 https://twitter.com/matthewstoller/status/1689397134905233408?s=20
@WallStreetSilv, "Salary envy among tech workers when they heard about UPS drivers getting $170,000 per year.
Some tech workers on social media pointed out the salary boost could make the drivers' salaries more competitive with white collar employees — and big tech workers responded with a mix of ire and appreciation for the union.
"This is disappointing, how is possible that a driver makes much more than average Engineer in R&D?" a worker at the autonomous trucking company TuSimple wrote on Blind, an anonymous jop-posting site that verifies users' employment using their company email. "To get a base salary of $170k you know you need to work hard as an Engineer, this sucks." Twitter, 9 Aug 2023, https://twitter.com/WallStreetSilv/status/1689466805746642945?s=20
@leadlagreport (Michael A. Gayed, CFA) "I will not relent. We are on the verge of a global margin call. A credit event is coming. No one is prepared." Twitter, 9 Aug 2023 https://twitter.com/leadlagreport/status/1689297973232926720?s=20
@lukeburgis (Luke Burgis), "Eugenics will be the single greatest moral danger and threat to humanity in the 21st century. People are talking about it without even knowing that they're talking about it—and that, to me, is the most worrying sign." Twitter, 9 Aug 2023 https://twitter.com/lukeburgis/status/1689272621186109440?s=20
Yields continue to fall, 2Y down to 4.74%, stock futures rising.
ReplyDeleteCPI a little weaker than expected at 3.2% v. 3.3% est. MoM in line at 0.2% on headline and core. Avg. Hourly Earnings 1.1%, down from 1.2% this afternoon
Jobless claims come in above expectations at 248K vs. 230K