Daily Economic Update: July 24, 2024

Sales of existing homes fell the most in 2 years as median home prices remain high and consumers feel the pinch of higher mortgage rates.  Stocks were slightly lower on the day as were yields lower. After hours Tesla and Alphabet earnings disappointed investors.

 The 2Y Auction saw very good foreign demand, printing over 2bps through where WI was trading.  The 2Y ended the day 4.50% and the 10Y at 4.25%.

In politics the Secret Service director resigned and away from politics part of Yellowstone park exploded itself and a whale jumped on a boat in New Hampshire. 

Flash PMI's and the 5Y Note Auction will be the highlights of the day ahead in data as Tech Earnings and Biden's 8pm address will also be in focus.  Outside the U.S. the Bank of Canada is also expected to cut rates for their second straight meeting.

XTOD: (long thread and a paper perhaps worth a read):  Summary: changes to Treasury's issuance policies have provided similar economic stimulus as a 1% cut in the Fed Funds rate, usurping core functions of monetary policy and blocking the Fed's efforts to restrain inflation and growth.....Let’s get into the mechanics: Treasury has an established rule of issuing 15% to 20% of debt in short-term bills rather than interest-rate-risk bearing intermediate/long-term debt (“coupons”).  They're violating this rule materially of late, issuing more bills and fewer coupons.  https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/635102_Activist_Treasury_Issuance_-_Hudson_Bay_Capital_Research.pdf

XTOD: Oil powers the machine everywhere. The economic machine. The activity machine. The war machine. The Machine. It is the substrate of power and might.  The uncertainty splintering the minds of many in the market could end in up with “oil as the next gold,” in the following way.

XTOD: An unusually large eruption of one of Yellowstone’s geysers occurred at Biscuit Basin moments ago.

XTOD: Want to know just how bad Delta's meltdown is?  The airline has now canceled 5,370 flights and counting since Friday.  That's more flights than Delta canceled in all of 2018 ... and all of 2019, too (5,343).  Two years worth of cancellations in less than five days.

XTOD: 6. Embrace Adaptation  

"Life is pretty simple: You do some stuff. Most fail. Some works. You do more of what works." ― Leonardo:

• Learn from both successes and failures.

• Stay flexible and open to change, continually adjusting your path as needed.

XTOD: BREAKING: The Biden administration's ban on noncompete clauses has been upheld in court, per MorePerfectUnion.

As of now, virtually all noncompete agreements with bosses will be banned and voided beginning September 4.

https://x.com/SteveMiran/status/1815749288284070019

https://x.com/PauloMacro/status/1815609289815511124

https://x.com/US_Stormwatch/status/1815824286562558358

https://x.com/kpottermn/status/1815720434635055531

https://x.com/BRannegger/status/1815719182333325335

https://x.com/unusual_whales/status/1815845951283814451