$7,000,000,000,000 sitting in money markets.
As rates come down that $7T will go somewhere. Where? • Gold • Bitcoin • Real Estate • Stocks Source: Grant Cardone
Is the Buffett rule sounding the alarm?
Since the 1990s, global financial assets have grown from 75% to over 200% of world GDP. Source: HolgerZ, Goldman
Gold, Utilities, healthcare and consumer staples are leading the S&P 500 this month
Source: WSJ
US funding market stress >>> Surging SOFR rates signaling a liquidity shortage
The most important indicator, as always, remains the SOFR rate: should the recent drift higher continue, the self-fulfilling cascade of a liquidity shortage will almost certainly be activated. And it did worsen... Source: zerohedge
Key Events This Week:
1. OPEC Monthly Report - Monday 2. Fed Chair Powell Speaks - Tuesday 3. NY Fed Manufacturing Index - Wednesday 4. Philly Fed Manufacturing Index - Thursday 5. NAHB Housing Market Index - Thursday 6. ~10% of S&P 500 Companies Report Earnings The data blackout on the US government shutdown continues.
Key Upcoming Events This Week:
Tuesday - NY Fed Inflation Expectations data Wednesday - Fed meeting minutes release Thursday - Fed Chair Powell speech Friday - MI Consumer Sentiment & Expectations data, September Jobs Report (if govt shutdown ends) Source: investing.com
A "too much growth" scare on Wall Street?
Interesting to see that yesterday's pullback was NOT prompted by bad US macro data: on the contrary, Thursday's economic number beat expectations across the board: 👉 Initial jobless claims unexpectedly tumbled to YTD lows, proving that the Texas-driven spike 2 weeks ago was indeed a one-time event... 👉 Durables goods ex-transports rose for a 5th straight month.... 👉 US Q2 GDP was unexpectedly revised sharply higher, printing at a whopping 3.8%, above all estimates, and the highest in 2 years driven by a bizarre surge in consumption - see chart below 👉US home sales were also well above expectations. In other words 4 for 4 on the data front. So much for those stagflation concerns... ‼️ But good (macro) news become bad news for the markets as the market quickly priced out odds of 2 rate cuts by December, closing the day at 1.56 rate cuts expected, down from 1.7 at the start of the day. It also pushed the 10 year yield and the greenback higher... At the time when equity valuations are extended, a rise in bond yields could indeed trigger some profit taking on US stocks Source chart: zerohedge
This table from BofA is a fantastic reminder that "all good things eventually come to an end."
Source: Lance Roberts, BofA
