On the 2Y Anniversary of the 2s10s inversion, a steepener trade is starting to work. The bond market seems to now care again about fiscal issues and how tariffs could lead to sticky inflation. Will this bear steepener hold, who knows.
In data, JOLTS showed more openings than expected, but downward revisions muddy the picture some as does the fact that the leading category of job growth is government (actually that's less surprising). In Fedspeak, Powell said he continues to see disinflationary progress and is characterizing risk as two-sided, with concerns about softening in the labor market. The 2Y remains near 4.75% and the 10Y near 4.45%. Stocks enjoyed more new records.
Meanwhile researchers from the St. Louis Fed seem a little less sanguine about inflation:
"To conclude, the mean inflation expectation only rose from about 2% before the pandemic to 2.5% in May 2024. However, the standard deviation also increased substantially, and the skewness switched from negative to positive, signaling right-tail risks on inflation expectations. The analysis in this post suggests that both second- and third-order moments should be taken into account to make assessments about future inflation and their risks."
It's an early market close but before we get there you have to wade through the deluge of data which includes ADP Employment, Jobless Claims, ISM Services and Factory Orders. At/after the close the Minutes of the last FOMC meeting come out. Then after fireworks and the UK general election (which Labour is expected to win in a landslide), Friday will go right into the Jobs Report.
XTOD: Strip clubs are always the most leading indicator of all...good old RICK has absolutely collapsed, this has led 2 of the last two recessions.
XTOD: LISTENING EARS, please. The stock market corrects when the Fed actually CUTS rates.
Until then, as it pertains to recession: 3) Unemployment lags the 3rd most (it historically rises after recession has begun) 2) Inflation lags the 2nd most 1) The stock market lags the most
XTOD: The Japanese yen is at a 37 year low, it’s the best time to plan a trip to Japan.
XTOD: Kamala for nominee futures are skyrocketing right now, doubled since noon:
XTOD: Year to date returns. Pretty wild.
S&P 500: +15.23%
S&P 500 Equally Weighted: +4.96%
S&P 600 Small Cap Value: -5.4%
XTOD: “Once you have enough for beans and rice and taking care of your family and a few other things, money is a story. You can tell yourself any story you want about money, and it’s better to tell yourself a story about money that you can happily live with.” — Seth Godin
XTOD: “Courage is not simply one of the virtues, but the form of every virtue at the testing point.” — C.S. Lewis
XTOD: Always stick to what makes you weird, odd, strange, different. That’s your source of power.
https://x.com/zerohedge/status/1808266329939759435
https://x.com/DiMartinoBooth/status/1808223186867441740
https://x.com/mabintou/status/1808052851777683613
https://x.com/quantian1/status/1808189934416846884
https://x.com/ValueStockGeek/status/1808101026823573508
https://x.com/tferriss/status/1808237390273597617
https://x.com/lukeburgis/status/1808099601339371737
https://x.com/RobertGreene/status/1807519498293141761
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