Market Commentary

Daily reports from our Chief Economic Strategist.

TRADE AND THE TREASURY MARKET
Many times I have commented about the lack of liquidity in the markets, the result of regulatory fiat, changes in market trading structures and the massive move to passive investing.
EQUITIES ENDED THE WEEK LOWER
Led by technology, equities traded lower. Some are pointing to yet another reduction in We Work’s valuation to under $8 billion. Several weeks ago it was valued around $47 billion. Others were pointing to Chinese data. While others suggested it was earnings and economic concerns.
LIQUIDITY IS STILL AROUND ANNUAL LOWS
Many times I have commented about the lack of liquidity, primarily the result of regulatory fiat, trading mechanics and passive investing. Considerable attention has been focused on the liquidity issues of the repo market, liquidity that is being provided by the lender of last resort—the Federal Reserve.
A SEMI CONSPIRACY RANT
Several times I have referenced JP Morgan’s Jamie Dimon’s view about the state of today’s research reports. Dimon opined many reports lack credibility at best, but impact trading given the contents of the reports is often times repeated in the Blogosphere thus offering false legitimacy.
WHERE TOO?
The fourth Democratic debate produced nothing of significance as the candidates continue to map out their very progressive agenda. As I commented yesterday, I do not think the country is this far left and I again ask is how will the candidates switch their narrative to increase the odds of winning the general election?
SOME POLITICAL AND MARKET THOUGHTS
Tonight is the fourth Democratic debate cohosted by CNN and the New York Times. I do not think it is a political statement to make the current slate of candidates is the furthest left ever fielded.
TRADING IS EXPECTED TO BE QUIET GIVEN THE COLUMBUS DAY HOLIDAY
Treasuries declined about 1 ½ points, perhaps the result of consumer confidence unexpectedly rising to the highest level in three months. Analysts had expected a decline. The gauge of current conditions climbed to the highest level this year while
TODAY IS SO STRANGE THAT NO ONE COULD HAVE MADE UP THESE EVENTS
Equities rose as China revised hopes of progress in trade talks. Volume was subdued because of Yom Kippor. Speaking of which, oil rose because Turkey—a member NATO-- began a military offensive into northeastern Syria targeting US back Kurdish militants.
SHARE OWNERSHIP RESTRICTIONS, MMT AND DEFICITS
Led by technologies, equities sank on reports that the US is moving toward restrictions on ownership of Chinese equities in government sponsored pension plans. I think it is noteworthy that there is bipartisan support for such a plan
A RELATIVLEY QUIET DAY
Some have commented that White House statements indicating it has no plans to delist Chinese companies helped offset the negative sentiment from Chinese remarks that it has narrowed the range of topics to be discussed. I am certain the interpretation of the upcoming meeting can be met by considerable volatility.
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