Treasuries are on track for their worst month in more than two years. The selloff has lifted yields over 60 bps for the month, a rise that many thought was unfathomable five weeks ago following the aggressive 50 bps reduction in the overnight rate and the expectations that another 75 to 100 bps of easing that will occur by year’s end.
This is the most the bond market has sold off since 1995 after the first reduction in the overnight rate. As noted the other day, yields on the 10-year and two year Treasury then rose 100 and 90 bps, respectively in the following twelve months.
The market is still suggesting a 97% chance of another 25-bps reduction at the upcoming November meeting and a 73% probability of a further 0.25% drop in December. By year end, the market is suggesting a 42 basis points decline from current levels.
Is this yet another example of a massive discrepancy between expectations and tomorrow’s reality?
Speaking of today’s reality [and possible irrationality] NVDA is worth more than the combined market capitalization of England and Canada. It is worth more than France’s market capitalization and valued more than Germany and Italy combined.
Writing the obvious, market expectations for NVDA are gargantuan.
Commenting on yesterday’s data, the JOLTS Job Opening statistics were lower than expected with the number of job openings falling to the lowest since early 2021. Consumer confidence however exceeded forecasts, rising by the most since March 2021 on optimism about the labor market strength.
After the close GOOG posted result that exceeded expectations, sending shares higher by 5% premarket. After the close both MSFT and META post results.
Last night the foreign markets were down. London was down 0.31%, Paris down 1.43% and Frankfurt down 0.86%. China was down 0.61%, Japan up 0.96% and Hang Seng down 1.55%.
Futures are flat. The 10-year is up 10/32 to yield 4.22%.
