Nothing too spooky in the markets this Halloween, we'll see if this morning's inflation data changes that, with the Fed's 'preferred' inflation metric, PCE, on the docket.
ADP payrolls crushed estimates, but ADP is historically noisy and generally provides a poor read through to Jobs numbers on Friday. The 3Q GDP data came in at 2.8% slightly below estimates but showed strong consumer spending and pulled down some due to weaker than expected fixed investment. Oh and productivity is up and at the end of the day, productivity is king going back to Adam Smith's Wealth of Nations.
The 10Y is back up to 4.30% and the 2Y is right around 4.20%.
UK Gilt yields fell following the budget, but when the market realized there was going to be a lot more supply, UK yields rose. As some would highlight that simply the global quantum of sovereign debt being issued creates a condition where the supply could mean that U.S. debt has to offer higher yields to compete. What might be at risk of being over-looked is that so far the market has really not struggled to absorb debt issuance, especially U.S. Treasuries. Remember that not too long ago people were talking about the risk of a "safe asset shortage", could it be possible that if at some point deficits are reduced that there might actually be a risk of creating a destabilizing shortage of safe collateral? That's probably a problem for another day, but it really wasn't that long ago that it was a concern.
Over in equities, EY resigned from their role as auditor of Super Micro Computer, while Microsoft and Meta earnings were met with kind of a 'meh', but mentioned AI so there’s that. Their shares are falling ahead of today. We'll get Amazon and Apple earnings after the bell today.
PCE is the highlight in data today. Less than a week until political calls and text stop.
XTOD: Donald Trump riding in a trash truck, after Joe Biden calls Trump supporters “garbage.”
XTOD: Former California Gov. Arnold Schwarzenegger criticized politicians but endorsed Vice President Kamala Harris in a lengthy statement posted to X on Wednesday
XTOD: British finance minister Rachel Reeves announced tax rises totaling 40 billion pounds, or 52 billion dollars — the biggest since 1993 — in a bid to upgrade health and education https://reut.rs/3NLuap1
XTOD: Celebrity is the most powerful currency in media, including financial media. It's more important than track record, novelty of insight, or ROI.
Most people just want to hear the latest take from the person they know, even if that person's been saying the same thing over and over again for years and has been consistently wrong doing it. It doesn't make sense rationally, but it's how most people behave in practice, which is why so many podcasts and financial conferences feature roughly the same voices with the same opinions saying the same things, no matter what is happening in the world. It's also easier for the producers of these media properties to source these voices. They have preexisting relationships with them, they know how to produce content around them, and who to sell it to. It's a win-win for everyone involved in the "ideas industry" even if those ideas are the intellectual equivalents of waste water or bad milk.
XTOD: "My journey in music taught me that sometimes you don’t need to force it. For years, I tried to make beats fit my ideas. Eventually, I learned to let the beat lead and let it show me where it wanted to go. It’s like magic when you stop forcing things and just let it happen." -Killer Mike
XTOD: "You climb as hard as you can by just advancing one inch at a time—that's the secret of life."
— Charlie Munger
https://x.com/peterjhasson/status/1851753672323010877
https://x.com/WSJ/status/1851759652859466206
https://x.com/Reuters/status/1851762758255034513
https://x.com/kofinas/status/1851630342781780309
https://x.com/RickRubin/status/1851647972586754292
https://x.com/InvestingCanons/status/1851626056324649124
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