Stocks fell for a third straight day as yields rose again. The narrative around the recent rise in longer term yields seems tied to increasing odds not just of a Trump presidency but of a Red Wave, making it more likely that deficits will increase in a faster manner than any scenario where there is division in government. A red wave was also predicted back in 2022 mid-terms and failed to materialize. The other cited catalyst for the recent bond selloff is around global deficit leading to increased supply that must compete for investor demand.
The 10y is right around 4.25% and the 2y is up to 4.10%.
The Beige Book showed the impact uncertainty plays on business with 15 mentions of election uncertainty. There was also low labor turnover and generally solid conditions across most districts.
Outside the U.S., the Bank of Canada cut 50bps to 3.75% as they see inflation as stabilizing at target.
Today is the big day for data with jobless claims, PMIs and home sale data. Still awaiting Israel’s retaliation, lest we forget.
XTOD: Insane stat from the Wall Street Journal that there are like 12 million full-time influencers in the US right now. That’s 7% of the American workforce
No way a bubble like that is at all sustainable
XTOD: 10 year interest rates are unchanged in the last 2 years and you have people on here saying the bond market is predicting USA bankruptcy.
XTOD: “For me an economic approach must help me understand the world, and provide me with some useful insights (preferably about my day job — investing). On those measures, let me assure you that MMT thrashes neoclassical economics, hands down.” ~ James Montier (GMO)
XTOD: "Good times teach only bad lessons: that investing is easy, that you know its secrets, and that you needn’t worry about risk. The most valuable lessons are learned in tough times."— Howard Marks
https://x.com/scopgieb/status/1849134883517431915?s=46&t=D2AESCsaw42dAEzgmjXHQA
https://x.com/cullenroche/status/1849228424755474852?s=46&t=D2AESCsaw42dAEzgmjXHQA
https://x.com/stephaniekelton/status/1849078843904045553?s=46&t=D2AESCsaw42dAEzgmjXHQA
https://x.com/valueinvestorac/status/1848907652824178710?s=46&t=D2AESCsaw42dAEzgmjXHQA
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