As a reminder of what's important see above. That said it is the most important CPI print since the last one. Riding on this one might be the fate of a 25 v. 50bp cut at the upcoming FOMC meeting next week. The closely watched components of the report are likely to be shelter (duh), but also the same recent faves around autos and auto insurance. Going into it we have the 2Y at ~3.60% and the 10Y at ~3.64%. Seemed like demand for the 3Y Treasury was solid given a record Bid-to-Cover.
Speaking of inflation, oil prices are getting smoked with crude falling to $66/bbl (from over $80 not to long ago) despite wars and a hurricane as analyst believe global demand is weak. I guess that might mean something for inflation at some point, or not.
I wrote this before the debate so you'll have to find interesting commentary elsewhere.
XTOD: “The economics profession has become insular and status-obsessed, and not focused enough on making a positive impact on the world.” https://t.co/rdfbzef8aE
XTOD: Commute to NY City This Morning: Distance: 19.1 miles Door to Door: 2 hours, 47 minutes!
XTOD: An ETF for private credit, which is inherently supposed to be away from public marks?
We truly are in the Golden Age of Private Credit.
XTOD: August NFIB Small Business Optimism Index Declines by Most in 2 Years (-2.7%) to 91.2
Particularly outsized declines in the net share of firms reporting positive earnings trends (down to -37% from 30% in July), expecting higher sales (-18% vs -9% prior), expect better economy (-13% vs -7%).
Other notable declines include the net share of firms planning to hire (13% vs 15%), higher selling prices (20% vs 22%), and plans to increase inventory (-1% vs 2%) The uncertainty index also rose to 92 from 90, its highest level since the peak of the pandemic. I’ll dig in more later, but the rather large and broad-based deterioration in small businesses confidence aligns with the downbeat August Beige Book.
XTOD: US Treasury says Yellen tests positive for COVID, working from home http://reut.rs/3XOoBw5
XTOD: Better to be out of a trade, wishing you were in it, than in a trade, wishing you were out of it.
XTOD: Dear Fed, please pay attention to the markets! Stocks tumbling, 10-year yield now at 3.65% as oil plunges to $65 per barrel & gasoline tumbles to $1.86 per gallon. Whatever CPI and PPI show, they are lagging indicators. Markets lead. Stick the soft landing with a half-point cut!
XTOD: By far the best measure of success I’ve found is how pleasant the passage of time feels to you.
https://x.com/michaelxpettis/status/1833480314368496122
https://x.com/junkbondanalyst/status/1833512883684315201
https://x.com/Econ_Parker/status/1833458605837701452
https://x.com/Reuters/status/1833654235906326629
https://x.com/dailydirtnap/status/1833613731047076328
https://x.com/rinsana/status/1833548826742857930
https://x.com/tomowenmorgan/status/1833592206101516595
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