US Home Prices hit a new all-time high in August while affordability has plummeted to record lows...please explain...
Source: Charlie Bilello
Marketable US Treasury Debt to Explode by $2.85 Trillion in the 10 Months from End of Debt Ceiling to March 31, 2024
In total, over those two quarters marketable debt will have increased by $1.59 trillion! This follows the $1.01 billion increase in Q3, and the surge in June after the debt ceiling ended. At the beginning of Q4, marketable debt outstanding was $26.04 trillion. The government will add $1.59 trillion to it, pushing it to $27.6 trillion by March 31, 2024. Source: Wolfstreet, WallStreetSilver
Beware the short squeeze... CTAs are now short $25 billion of US equities, one of the largest short positions in the 8 years...
Source: Barchart
The US equity market ultra-dominance
Source: Michel A.Arouet, Bloomberg, Goldman Sachs
US To Borrow $1.5 Trillion In Debt This & Next Quarter, After Borrowing A Massive $1 Trillion Last Quarter
During the October – December 2023 quarter, Treasury expects to borrow $776 billion in privately-held net marketable debt, assuming an end-of-December cash balance of $750 billion. The borrowing estimate is $76 billion lower than announced in July 2023, largely due to projections of higher receipts somewhat offset by higher outlays. During the January – March 2024 quarter, Treasury expects to borrow $816 billion in privately-held net marketable debt, assuming an end-of-March cash balance of $750 billion. Source: www.zerohedge.com
The US treasury curve is going in all directions
Interest rate futures are beginning to price-in a potential rate CUT this week, at a 5% chance. Meanwhile, the base case still shows rate cuts beginning in June 2024. However, odds of another HIKE in January 2024 are now up to ~36%... Source: The Kobeissi Letter
With the US 10-year yield close to 5%, long duration bonds start to look attractive
There is one issue though: sentiment on long-dated bonds look too optimistic E.g 1/ not a single sell-side analyst does have a 10-year target yield above 5% for the next 6 months; 2/ Long-dated bonds funds are enjoying record inflows; 3/ Magazine cover pages look upbeat on bonds (source: J-C Parets). The consensus is not always wrong but so much optimism is usually not a good sign from a contrarian perspective.
As highlighted by Tavi Costa, despite the recent push toward new highs, gold remains severely under-allocated
In fact, 71% of US advisors have little to no exposure to the metal. Similar to how Central banks continue to aggressively accumulate the metal, conventional investment portfolios have yet to take steps to find true diversifiers. Sources: Tavi Costa, BobEUnlimited
