Hedgeye cartoon on the Fitch downgrade
source: Hedgeye
Interest payments on US government debt are soaring
source: Markets & Mayhem
Fed QT accelerates. Fed balance sheet shrank $91bn in July, -$759bn from peak, biggest drop ever to $8.2tn, lowest level since July 2021
Fed has now shed 22.3% of the Treasury securities it bought during pandemic QE. Fed's total assets now equal to 30.6% of US's GDP vs ECB's 53%, BoJ's 130%. Source: HolgerZ, wolfstreet.com
The Citi US Economic Surprise Index is at the highest levels since early 2021
That being said, there has been some divergence recently between "hard" and "soft" data. Indeed, 'Hope' has been in charge of macro data recently with 'soft' survey data surging back in its mean-reverting manner as 'hard' real data has been fading (led down by industrial, personal finance, and housing data)... Source: Bloomberg, www.zerohedge.com
Before dumping your government bonds think twice
Over the past 40 years, US treasury yields have always declined six months after the last Fed hike. Source. Edward Jones
Another big week ahead for us earnings
$PLTR $DIS $BABA $RIVN $AMC $UPST $SMCI $UPS $LCID $LLY $TWLO $PLUG $MARA $TTD $NVO $DDOG $RBLX $NVTA $CELH $SOUN $IONQ $TSN $GOLD $SWKS $WYNN $LAZR $MGNI $APPS $CHGG $ARRY $SONY $DNA $BRK.B $MPW $TOST $PARA $LYFT $BROS $LI $SWAV $FIVN $CYBR $CPA $CGC $VTRS $PENN $RNG $NVEI $CLOV $OKE Source: Earnings Whispers
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
