– VALUATION MATTERS: The S&P 500 is now trading at 3.2x sales, its highest valuation in history; the S&P 490 trades on 21x P/E (vs avg 15.8x), top 10 on 28.7x (vs avg 20.7x) – RETAIL vs QUANT ARMY: US retail holds 41% of US equities, fuelled by total margin debt at all tiem highs $1.1trl… CTA’s have a 6:1 sell-to-buy skew on rebal triggers. Read More
*FED GOVERNORS WALLER AND BOWMAN RELEASE STATEMENTS ON DISSENTS *BOWMAN: CUT WOULD PROVIDE HEDGE AGAINST FURTHER WEAKENING *BOWMAN: LABOR MARKET SHOWING INCREASING SIGNS OF FRAGILITY *WALLER: FED SHOULDN’T WAIT FOR LABOR MKT DETERIORATION TO CUT *FED’S WALLER SAYS FOMC SHOULD BE MOVING RATES CLOSER TO NEUTRAL *WALLER: TARIFFS WILL HAVE A ONE-OFF IMPACT ON PRICES *WALLER: PRIVATE-SECTOR HIRING NEAR ’STALL SPEED’ *FED’S BOWMAN SAYS GRADUAL CUTS APPROPRIATE WITH GROWTH SLOWING Read More
Since American businesses are bearing almost all of the cost of the president’s trade war, corporate profits could come in for a beating. The big news is that we are staring down the barrel of interest rate cuts from the Reserve Bank of Australia and the US Federal Reserve in August and September, which would be a boost to confidence. Following deputy governor Andrew Hauser’s comments on Thursday that the soft June-quarter inflation data was […] Read More
Bank views on QRA JPM: -Assuming the TGA rises to $850bn by the end of this quarter and remains at that level at year-end, we project $1,087bn and $572bn of net marketable borrowing in the current quarter and next quarter, respectively. -Looking to the policy statement, we expect Treasury to announce no changes to nominal coupon auction sizes for the current quarter, given that it is well funded in the current fiscal year, and given […] Read More
Month End Extensions Extns/Month Rebalances . Large Gilt, US +0.05, EGB +0.04. Rebal towards bonds from equities {US} UST Aggregate Index: +0.05y This a is a non refunding month, with a duration extension +0.05y, below its July average over the past three years +0.07y, and below its 12-month +0.07y. Additions to the index this July are new 2y/3y/5y/7y bonds for an estimated total $241bn. Around ~$202bn ($178bn free float) amount outstanding of UST’s are set […] Read More
*TRUMP SPOKE TO LAWMAKERS TUESDAY ABOUT WHETHER TO OUST POWELL *TRUMP LIKELY TO FIRE POWELL SOON, WHITE HOUSE OFFICIAL SAYS *OFFICIAL CAUTIONS NO EXACT TIMELINE FOR DECISION ON FED CHAIR Read More
European Central Bank Executive Board member Isabel Schnabel said there’d have to be a major downward shift in inflation to justify another reduction in borrowing costs. Schnabel said “the bar for another rate cut is very high” and that there would only be a case for another rate cut if inflation deviates from the target over the medium term. Schnabel said she sees no risk of a sustained undershooting of inflation over the medium term, […] Read More
ADP first negative print since Feb’21. “Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month. Still, the slowdown in hiring has yet to disrupt pay growth.” “Job losses in professional and business services, and education and health services led the decline. Leisure and hospitality, and manufacturing showed gains.” “Year-over-year pay growth for job-stayers was little changed for June at 4.4 percent […] Read More
OFF RAMP? Some high-ranking Iranian diplomat reportedly said that the real priority of the Supreme Leader and Iran govt is survival… Iran is prepared to give up uranium enrichment to preserve the regime, but need a face-saving solution. “The army and the IRGC will inevitably lose control of the situation, and no one knows what might happen next. We do not want to repeat Saddam Hussein’s mistake. We are ready to negotiate,” added the diplomat, […] Read More
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