Goldman:
"Market participants seem to agree that the risk to Fed independence is rising, as 5-year 5-year forward inflation swaps have recently decoupled higher from their prior close relationship with the 2-year note yield." Source: Nick Timiraos
U.S. Dollar Index $DXY on track to get a Death Cross ☠️ on the weekly chart for the first time since January 2021
🚨 The last 2 weekly Death Crosses marked the bottom 📈 Source: Barchart
This is how many investors currently feel... but we disagree.
There are "reasons" behind the current bull market. First, liquidity conditions remain favorable with Global M2 (a global liquidity proxy) going up. Second, earnings remain a tailwind with positive earnings revision and 2026 earnings growth reaccelerating. Third, the global macro & geopolitical context is more favorable than in H1 with some clarity on tariffs expected to improve in the coming months and lower taxes ahead. Of course, there are many risks to be taken into consideration but the probability of occurrence is probably exaggerated (e.g. ousting of Fed chairman Powell seems unlikely). But yes indeed, with this level of valuations, any unexpected event could trigger a very decent correction. So stay invested but keep some dry powder to buy the next dip Source picture. Brew markets
Japan’s 10y bond yields have jumped to their highest level since 2008, driven by growing fiscal concerns.
The spike came after President Trump announced a trade deal w/Japan. It appears Japan may be covering part of the cost of US car tariffs by using its own investment funds–essentially a partial bailout to smooth the deal. Source: Bloomberg, HolgerZ
PRESIDENT TRUMP JUST SAID:
- WE ARE THINKING ABOUT NO TAXES ON CAPITAL GAINS ON HOUSES Source: Evan
More than 80% of fixedincome assets yield above 4%.. income is back.
Source: BlackRock thru Mike Zaccardi, CFA, CMT, MBA
Breaking news:
The US House Speaker has shut the congressional chamber until September, as Donald Trump’s allies seek to contain a spiralling crisis over the administration’s handling of the Epstein case. Source: FT
The 100 most shorted stocks in the Russell 1,000 are up 52% over the last three months and have beaten the index by 33 percentage points.
Not quite "meme-stock mania" from 2020/2021 but definitely elevated. Source: Bespoke
