This October is already making history as McCarthy was forced to vacate the speakership, a first in U.S. history. Of course this raises the prospect of a government shutdown. Everything sold off yesterday with the 10Y yield crossing 4.80% as bonds continued to bear steepen, and stocks falling by over 1%. The USD-JPY touched 150 before it is assumed the BoJ intervened to support the Yen. This all following stronger than expected job opening data. The 2Y is currently yielding 5.14% and the 10Y at 4.81%.
On the day ahead we'll get ADP employment, services data and plenty of Fedsleak.
XTOD: Every past market decline looks like an opportunity, every future decline looks like a risk.
XTOD: Could 10-year Treasury rates hit 13%? @RickSantelli charts the path to much, much higher yields, and warns that the Fed is running out of tricks
XTOD: The JOLTs summary - hiring rate stays below 2019 levels, quits remain right at it, openings have a slight reversal (though v/u remained the same for August).
XTOD: The Beveridge Curve has Normalized in a big way…. Solid progress, but economic strength continues - that’s a good thing when people have jobs.
XTOD: Markets in a very dangerous spot here. Statistical risks flashing red. Banks and Utilities too. Credit starting to move. Lev loans liquidity sucked out. CRE unwind accelerating and housing market about to freeze.
XTOD: But here’s the thing: the trade in 1987 was to play an equity crash. The trade today is to play the bond crash in 2023. Buying bonds then or shorting equities now was/is a deriv that may or may not work (worked in 87).
XTOD: He will go down in history as the man who reversed 30 yrs of ZIRP insanity. like him or not, he pulled the punch bowl away. Those that fail to see this, either support returning to an overleveraged ZIRP environment, or just dont understand how truly insane Greenspans spawn were.
XTOD: A Nobel Laureate Offers a Biting Critique of Economics - Angus Deaton says Larry Summers and other great minds in the profession have lost sight of its most important mission: Improving people’s lives.
XTOD: New monthly GDP estimates from S&P Global are out! NGDP grew at a 10.6% m/m ar (annualized rate) in August, accelerating from 9.2% in July....Consider the notion that inflation is what happens when there is too much money (NGDP) chasing too few goods (RGDP)....It's highly doubtful that RGDP can sustainably grow above 2%. Therefore, if NGDP growth is too high as S&P Global's estimates indicate, we should be ready for inflation to show some resurgence. Will be closely looking at NGDP when BEA releases its Q3 data on 10/26.
https://x.com/morganhousel/status/1709228935819714750?s=20
https://x.com/CNBCFastMoney/status/1708955044064673885?s=20
https://x.com/mtkonczal/status/1709212475915129211?s=20
https://x.com/gamesblazer06/status/1709211901757161740?s=20
https://x.com/INArteCarloDoss/status/1709266299199590889?s=20
https://x.com/JMiChicago/status/1709287724073570616?s=20
https://x.com/BrankoMilan/status/1708863731931738155?s=20
https://x.com/alexschibuola/status/1708968054464323589?s=20
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