SIFMA bond market closure for Columbus Day while stock markets are open. The 2Y is 3.97% and the 10Y is 4.10%.
Last week ended with stocks at all time highs. Investors don't yet seem wary of the old proverb that "trees don't grow to the sky". And why should they be wary, when you have seemingly unending demand for AI and the chips that power them, we've got events with robots, rockets that get caught by their launching towers, banks that earn money from the Fed irrespective of whether they actually do banking, politicians globally promising to stimulate everything, everywhere all at once. But I digress.
Friday's PPI data quelled some inflationary fears, though energy prices were a big piece holding the overall reading flat month over month, which could reverse in the coming months with rising oil prices, the core reading was up 0.2% MoM which was slightly below expectations. The UofM data showed some softness in consumers confidence in the current conditions and their expectations for the next 12 months while also showing an increase in consumers expectations for the next 12 months. Speaking of inflation data, China's inflation continues to slow, did China ever follow through with all of that stimulus investors loved a week ago?
For the week ahead we move on from inflation to retail sales and industrial production as well as corporate earnings. The ECB meets and is expected to cut 25bps. Thursday looks to be the big day for activity on the data front.
Over the course of last week, markets seemed to start to discount the probability that an Israeli response against Iran will be something impactful.
Mon: Fedspeak
Tue: Empire Mfg, NY Fed survey about consumer inflation expectations, Fedspeak
Wed: nothing major
Thur: ECB Decision, Retail Sales, Jobless Claims, Industrial Production
Fri: Building permits, housing starts, more Fedspeak
XTOD: Power is the worst drug on Earth and you have no idea how many addicts are running around.
XTOD: This but for the whole economy. Not a joke either: “Years of having financial engineers as CEO, rather than real engineers, finally catches up to Boeing…
XTOD: Sitting on the sidelines? In money market accounts? Nope, that’s smart money.
Congrats, you’re in the cheapest part of the curve, with the least amount of interest rate risk.
There are other cheap, safe, floating-rate assets that float off of this part of the curve.
XTOD: @AtlantaFed ’s sticky price CPI (slow-to-change consumer prices) rose 3.9% on an annualized basis in September, following a 3.5% increase in August. Graph and track the index in FRED: https://ow.ly/CTfp50TJcQ1
XTOD: "We should all just acknowledge that we operate within a fully managed financial system where the authorities have all of the tools to ensure that we never have a 2008-style crisis again or even a recession or recessionary conditions in markets again. So, the big risks now don't really exist in the areas of the market that most people typically consider; rather, they're externalized to the political and social domain. For example, the big risk I see is that a political party in Europe, the US, or some other major economy will recognize people's frustrations and anger about various issues like feeling left out or left behind, and will perceive central banks to be a major instrument responsible for propagating this accelerating gap, and decide to take away their power to use their tools on behalf of markets. This is the type of thing that market participants need to price in, and these things don't just break out in one direction or another. When we do lose equilibrium, things break out fast and to a much larger extent than they used to. These are real risks that could generally derail the economy and financial markets…risks like the people wrestling control of the monetary system from the Fed, which is not on people's radars…" @GestaltU on @HiddenForcesPod (10/14/2024)
XTOD: The reason most people can’t walk away is simple: they operate from a scarcity mindset.
XTOD: You lack discipline because you fear success
https://x.com/vtchakarova/status/1845546817678643582
https://x.com/clintballinger/status/1845183421988974863
https://x.com/sweinand/status/1844774935123710409
https://x.com/stlouisfed/status/1844566143689764955
https://x.com/kofinas/status/1844755128919916571
https://x.com/ArtfulPrudence/status/1844075483182530941
https://x.com/chaseaustiinn/status/1844421369028895109
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