sellside observations (any money market PMs? terminal and the Tetons; ice age finally broken, here's what is next) and...
Good afternoon … a couple of impromptu / unscheduled days off and hopefully absence has made the heart grow fonder?
Ok, likely NOT the case SO … Good thing BARRONS has all you’ll need to know and says it with just one COVER IMAGE,
With summers shot-clock winding down, I’m not going to waste much, if any MORE of your time …
HERE are a few observations from Global Wall Streets inbox I’ve cobbled together. Some highlights which are, in my view, straight forward,
MSs Sunday Start asks, What If Holding Cash Is Just Efficient Asset Allocation?
Goldilocks Global Rates Trader: Slower pace should steepen curves
BMOs Weekly — Terminal and the Tetons — notes,
… CEO confidence and YoY S&P 500 performance has rarely eroded this quickly without a formal recession
And while correlation is NOT causation, check out their visual of biz confidence and NFP … just sayin’ …
Finally, when someone who’s typically known for a lower rates call and an ICE AGE thesis comes out with a weekly note titled, “The Ice Age is finally broken – welcome to the multi-year tightening cycle” and a conclusion like this,
… my own view is definitely along the same lines, except I think we are set for a very lengthy secular rise in rates and that despite a collapse in headline inflation in the coming recession, core inflation will likely rise through many cycles rather than be tamed. But I sure agree with Bob’s view that this is not one (tightening cycle) and done. There is much more to come.
You should want to read on and about it…
They are excellent pool/beachside accompaniments and may help as you plan your JACKSON HOLE trades and TRADE your JACKSON HOLE plans. Hopefully these plans and trades include some room for 2s Tuesday, 5s Wednesday and 7s Thursday. Which, consequently, then opens up the rest of the more consequential week and summer ending meeting out in the Tetons,
As we wait, here are a few other links / things I’m thinkin’ about thinkin’ about IF time and weather permits,
BBGs, weekly fix: bond bulls run head first into faster Fed runoff
… Kathy Jones, chief fixed income strategist at Charles Schwab, thinks that collision course will ultimately end with the Fed putting an early end to QT:
It wouldn’t make sense for the Fed to be cutting short-term rates and tightening through the balance sheet. That’s going to create a lot of distortions in the system... It remains to be seen whether the Fed reverses course that quickly or whether they try to get to a plateau and sort of stay there for a while and let the runoff continue but it’s going to be a real challenge. I would not count on reaching that $2, $2.5 trillion decline over the next couple of years in the balance sheet. I think it’s more likely that it maybe comes down a trillion, a trillion and a half and then kind of has to end there for the time being.
For those keeping track at home, the Fed’s balance sheet currently clocks in at just under $8.9 trillion — not too much changed from a peak of about $9 trillion reached in April…
GUGGENHEIM Macro Alert – Stocks Are in Trouble if S&P Fails to Break Above its 200-day Moving Average
IF you are now deciding what to do with the S&P, perhaps some further / different context would be of some use … Uncle Warren vs S&P 500
For those STILL TRYING (and/or critisizing) their hand at economic forecasting and recession dating, please consider this from St. Louis FED
Dating Economic Recessions in Real Time Is a Challenge
Backward-looking data and regular data revisions are among the challenges facing the NBER when determining whether the economy is in a recession.
Here’s one from across the pond which you might enjoy … From the ECB,
Some nice charts and very quick and easy to follow to get main points. ECB has been increasingly relevant to global market asset volatility.
And as summer winding down, so too is the WFH model, at least in some corners, the quants at the FRBNY econ dept have something else to offer,
Liberty Street Economics: Remote Work Is Sticking
When the pandemic hit in early 2020, many businesses quickly and significantly expanded opportunities for their employees to work from home, resulting in a large increase in the share of work being done remotely. Now, more than two years later, how much work is being done from home? According to firms responding to our August regional business surveys, about 20 percent of all service work and 7 percent of manufacturing work is now being conducted remotely.
AND for any / all (still)interested in trying to plan your trades and trade your plans in / around FUNduhMENTALs, here are a couple economic calendars and LINKS I used when I was closer to and IN ‘the game’.
First, this from the best in the strategy biz is a LINK thru TO this calendar,
Wells FARGOs version, if you prefer …
… and lets NOT forget EconOday links (among the best available and most useful IMO), GLOBALLY HERE and as far as US domestically (only) HERE …
And finally, a few (not very)funnies as the Missus heads back to school tomorrow and kiddos start in a week or two ‘round here … First via Jeff Koterba, Cagle.com
Next via John Cole, Scranton Times-Tribune
… how’s ‘bout that ZERO POINT ZERO inflation rate, Via Comically Incorrect
… THAT is all for now. Off to enjoy the remainder of the weekend …