3 companies own the soft drink market
Source: Genuine Impact
Tokyo core-core CPI inflation printed at +0.575% MoM
That's the 2nd biggest monthly increase since Covid. And one of the biggest monthly increases over the last 30 years outside of sales tax hikes. Inflation is not transitory in Japan... $JPY. Source: Viraj Patel, Vanda Research
With 46% of companies reported, S&P 500 Q2 GAAP earnings per share are up 7% over the last year, the highest YoY growth rate since Q4 2021.
Source: Charlie Bilello
US Treasuries sold off yesterday and are now on the verge of a breakdown from support
The chart below courtesy of Crescat Capital / Tavi Costa is a reminder of the divergence between rising yields and the highly valued Nasdaq index. Is this divergence sustainable? Source: Bloomberg, Tavi Costa
It has never been cheaper to hedge against a market crash
According to Bank of America's derivatives strategists, it has never cost less to protect against an #sp500 crash drawdown in the next 12 months. Why is the cost of longer-dated S&P protection at record lows today? The most common explanations are a mix of fundamentals (e.g. a recession, if it materializes, will be short-lived and shallow; or, realized correlation is too low to warrant higher implied correlation) and vol technicals (e.g. the supply of vega on US underlyings for yield remains robust; or, due to the rise of short-dated option selling, the next shock will likely be a “gamma event” in which systemic tenors of risk don’t react strongly). Source: BofA, www.zerohedge.com
Niger was one of the few democracies left in the Sahel belt which stretches across the continent
But now that the army has seized power, there are concerns over what this means for the troubled region. Indeed, from Mali in the west to Sudan in the east, a whole swathe of Africa is now run by the military. Niger's President Mohamed Bazoum - a key Western ally in the fight against Islamist militants - was defiant after soldiers announced a coup on Wednesday. But he has been detained, the army chief has backed military rule, and it isn't clear who is really in charge. Former colonial power France and the US have military bases in the uranium-rich country, and both were quick to condemn the coup (1/3 of uranium used by France comes from Niger...) There are also concerns that Niger's new leadership could move away from its Western allies and closer to Russia. If it does, it would follow the path of two of its neighbours - Burkina Faso and Mali - which have both pivoted towards Moscow since recent military coups of their own. Source: Reuters, image by FT
There it is. The BoJ adjusts Yield Curve Control (YCC)
Japan’s central bank on Friday pledged greater flexibility in yield curve control policy, while keeping its ultra loose interest rate intact and revising its median consumer inflation forecast upward for the current fiscal year. - The Bank of Japan added it will offer to purchase 10-year JGBs at 1% every business day through fixed-rate operations, unless no bids are submitted — a move that effectively expands its tolerance by a further 50 basis points. - In a policy statement, the Bank of Japan said it will “continue to allow 10-year JGB yields to fluctuate in the range of around plus and minus 0.5 percentage points from the target level.” - “While it will conduct yield curve control with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits, in its market operations,” it added. - Still, the BOJ held its short-term interest rate target at -0.1% after a two-day meeting. It also raised its median forecast for inflation to 2.5% for fiscal 2023 after its July meeting, up from its 1.8% prediction in April. Market reaction? The Japanese yen strengthened and 10-year JGB yield rose after the Bank of Japan statement: - Yields for 10-year Japanese government bonds rose to 0.575% for the first time since September 2014. - The yen was trading at 138.64 against the dollar at 12:35p.m. Hong Kong and Singapore time. Source: Viraj Patel, CNBC, Bloomberg
US 10-year treasury yields are trading back above 4% and this most likely due to a batch of strong US hard data. Indeed, the US economy remains "red hot":
1) Initial jobless claims were expected to rise modestly last week - after hitting 2-moth lows the prior week - but instead they tumbled further to 221k (the lowest since Feb 2023) - TOP LEFT CHART 2) Continuing Claims also dropped to 1.69mm Americans - the first time back below 1.7mm since Jan 2023... - TOP RIGHT CHART 3) US GDP Grew An Unexpectedly Hot 2.4% In Q2 Despite Fed's Aggressive Tightening Campaign - BOTTOM LEFT CHART 4) Orders for Durable Goods printed a 4.7% MoM surge (almost 4x the expected 1.3% rise) - that is the biggest monthly rise in durable goods orders since July 2020 - BOTTOM RIGHT CHART Can the #fed really afford to put an end to their #interestrates hike cycle? Source: Bloomberg, www.zerohedge
