Welcome to September, historically the worst month of the year for two fundamental reasons. First, retail credit lines are fully extended ahead of the holiday season this elevating the stress within the financial system. This seasonal factor has waned in recent years however it is still an issue. Perhaps more significant, September is typically the … Read more
Yesterday was much to do about nothing. For the day NVDA’s earnings were a non-event. As shares were largely unchanged. As widely noted, earnings exceeded expectations but potentially the results or the forward-looking statements did not match the lofty expectations. Revised second quarter GDP largely met expectations, having minimal effect on the indices.. Today is … Read more
NVDA has a $4.4 trillion market capitalization and is about 8.2% of the S & P 500. These amounts are unprecedented on both the absolute and percentage basis. Some have stated that NVDA is the most important stock in the world given its potential outsized influence that a surprise can have upon the global indices. … Read more
The yield curve between the two-year and 30-year Treasury is the steepest since 2021, partially the result of the possibility that inflationary pressures may become unanchored. A strong argument can be made that if the President succeeds in jawboning/bludgeoning the Fed to lower the overnight rate, long term interest rate could go in the opposite … Read more
Tomorrow after the close NVDA posts results. The company is worth approximately $4.3 trillion or about 8% of the S & P 500. It is arguably the most important company in the indices and its performance can greatly impact on the performance of global ETFs. As noted last week according to Reuters, approximately 60% of … Read more
The markets interpreted FRB Chair Powell’s market as “decisively dovish,” all but cementing an interest rate reduction at the September meeting. The S & P 500 halted a five-day decline, rising about 1.5%, two-year Treasury yields, which are more sensitive to imminent policy moves, sank about 10 bps, and Fed Fund futures are now suggesting … Read more
Will FRB Chair Powell Jackson Hole speech increase volatility? As noted the other day, there is precedence of a major change in monetary policy announced at this annual gathering. At this juncture, the market is seeking assurances that a rate cut is likely at the September meeting. The major topic of this year’s flagship event … Read more
Will tomorrow’s comments by FRB Chair Powell alter monetary policy expectations? At the time of this writing there is a 78% chance of an interest rate reduction at the September meeting and almost 50 bps of easing are discounted by year’s end. There is ample precedence of significant changes in monetary policy announced at the … Read more
The $25 billion sale of 30-year treasury yields was regarded as “weak.” Yields, however, on both the 30-year and 10-year benchmark are still lower today than at the start of the year. The 30-year was yielding around 4.81% and 10-year was yielding about 4.56% on January 2. Today the yields are 4.80% and 4.25%, respectively. … Read more
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
