Adjectives used to describe yesterday’s $42 billion auction of the 10-year Treasury were “pretty terrible,” “poor,” and “very discouraging” given that the benchmark was “cheapened up” before the auction. Some are fearful that this is a harbinger of auctions to come given the incessant demand for monies in an environment that is unquantified for a … Read more
The US government plans to borrow $100 billion in a single Treasury debt sale this week, an amount that was unfathomable 20 years ago and exceeds previously issued guidance. This unprecedented figure showcases both the magnitude of the government’s borrowing needs and the importance of its ability to attract investors. The Treasury said it will … Read more
Optimism over monetary policy and profits was the catalyst for a moderate advance. The market is suggesting almost an 86% chance of an interest rate reduction in September and almost 50 bps of easing is now anticipated by year’s end. There is little on this week’s economic calendar that could alter this view. Regarding earnings, … Read more
July’s unemployment data was weaker than expected. Moreover, there were considerable downward revisions from prior months. With the revisions, employment growth over the last three months has averaged 35,000—the worst since the pandemic. Approximately 40% of the revision was in state and local government education payrolls. The unemployment rate rose 4.2% vs 4.1% the month … Read more
MSFT and NVDA are both $4 trillion companies representing about 15% of the S & P 500’s capitalization. The combined companies are worth about 7.5% of global GDP, amounts that are incomprehensible and tough to rationalize. Is a Minsky Moment now at hand, defined as the point where a crisis occurs after a long period … Read more
Yesterday’s data was stronger than expected. Second quarter GDP expanded by 3.0% versus a 0.5% decline registered during the first quarter. The data has been heavily skewed by trade and tariffs. Net exports added 5 percentage points to GDP after subtracting the most on record in the first three months of the year according to … Read more
Today is the conclusion of the FOMC meeting and it is almost unanimous that the Committee will not lower rates or adjust its balance sheet. Moreover, most agree there will be little change in the statement with perhaps some downgrading of the growth and uncertainty components. During the post-meeting press conference there might be questions … Read more
Can an argument be made that there is too much evidence available, to the point that one can find convincing reasons to believe almost anything. Then confirmation bias takes over and what someone wants to happen is going to happen. As noted several times, no one is completely objective and those who claim they are, … Read more
Will this be an eventful week? There are several profit reports from the Magnificent Seven. There is a data dump including initial estimates of second quarter GDP, PCE data, a labor report and a FOMC meeting. Ot will the hype leading into these top tier events be nothing more than noise? Commenting about earnings, Bloomberg … Read more
Weekly jobless claims fell for the sixth consecutive week, the longest stretch of declines since 2022. The number of claims was also lower than any estimate. Treasuries sold off on the news as it again alters the odds of any immediate change in monetary policy with the market now discounting less than two reductions in … Read more
