Junk bonds are outperforming as soft landing narrative builds
High-yield has returned 6.50% this year vs 3.70% for high-grade.
Junk bonds are emerging as a sweet spot in global fixed-income markets wracked by some of the worst volatility this year, as investors increasingly bet that major economies will avoid recession for now.
Source: Bloomberg
As highlighted by Tavi Costa, the implied demand for oil just surged to all-time highs
It was the largest weekly increase in 26 years. Meanwhile, US oil production remains ~7% below pre-pandemic levels with total operating rigs starting to contract for the first time in 3 years. Source: Bloomberg, Crescat Capital
A mixed message from the July US jobs report: the US economy added 187k jobs according to Establishment survey, a tiny bit below Street’s +200k forecast
According to the Household survey, the number of employed people rose by 268k. Because of this 268k number, unemployment rate dipped to 3.5%, down from 3.6% in June and below estimated 3.6%. Wages ran hot, coming in at +4.4% YoY (vs Street +4.2% and vs +4.4% in June). Source: HolgerZ, Bloomberg
Nasdaq has now been 'overbought' for 60 days
Its longest period since the run-up to the bursting of the dot-com bubble...
Who is the most active congressional trader?
Well, the answer lies with Josh Gottheimer, a Member of the U.S. House of Representatives in New Jersey's 5th congressional district. 📈His trade volume is significantly higher than the next most active trader💰！ Source: Genuine Impact
The slow-motion US banking crisis is still not out of the woods...
Indeed, US Money Market funds saw a third straight week of inflows ($29 billion this past week) to a new record high of $5.15 trillion...Retail money-market funds saw inflows for the 15th straight week (and institutional funds also saw a second straight week of inflows)... Usage of The Fed's emergency bank bailout facility rose by $606 million to a new record high at $106 billion... And as highlighted on the chart below, the decoupling between money-market fund inflows and bank deposits continues.. Could the current bloodbath in bonds be the catalyst for another round of pain? Source: www.zerohedge.com, Bloomberg
Why fees matter, visually:
Source: Brian Feroldi
CTAs are long net $58BN in US equities, just shy of the upper-end of the 5-year range
Could they trigger an acceleration of the equity sell-off if the S&P 500 breaks some key support level? Here are the key levels to watch according to GS: Short-term threshold = 4440 (-1.6%) Medium-term threshold (the most important one) = 4257 (-5.6%) Long-term threshold = 4240 (-6.1%) Source: Goldman
