Did we learn anything new last week? Germany is struggling, the US labour market remains strong, AI chips are in demand, 10yr rates consolidated 4.15-4.35% range, China is pushing back against CNH weakness and JPow wants "higher for longer". Let's be honest, last week volumes dipped as 'ooo' emails remain as popular as Patrick Mahomes in fantasy drafts. It was nice to see a reduction in China's "Lehman moment" themed pieces, with Jackson Hole previews dominating Harkster.com. Even that event though failed to deliver any sparkle, as, like ourselves, Central Bankers remain resolutely data dependent. Powell can see more hikes (but the mkt has that priced), and unsurprisingly he is not yet comfortable to declare victory. How can he be as the Atlanta Fed amended its GDPNow forecast up 0.1% to 5.9%!
The global weakness in PMI was a surprise... German Manfacturing was already under pressure but it was the gap down in service/manufacturing leading indicators in the UK and especially in the US that took the sting out of the global duration sell off. However, the ever-resilient initial claims quickly reset US fixed income wider and stopped any rally / short squeeze as quickly as it started. Four cuts are already in the curve for 2024, what will it take for more to be added, for a US recession to be priced? Next week it's a major US data week with NFP, PCE and ISM set to print as well as corp t+2 USD flows and month end rebalancing. Stay nimble, any weakness in the US story and look for Nov pricing to be reset towards unchanged and 2s10s to flatten, unwind some of the recent August re-pricing. This should support JPY, CHF, AUD and ZAR against the USD if the US data is no longer exceptional.
Below please find some podcasts that Harkster HQ found interesting, as ever, a sample of week-ahead previews and links to some pieces that captured the important narratives that drove market's last week. You will hopefully find something to occupy tomorrow's UK bank holiday after what looks like a quiet Wellington Open .. Good luck, and keep smiling!
The key narratives that drove markets last week:
Lyn Alden: Six AI Themes to Consider
The Macro Tourist: Weekly Wrap Up
Brent Donnelly: Friday Speed Run
Daily Chartbook: #267
The BondBeat: Weekly Observations
ING: Powell signals Fed to tread carefully, but that rates will stay high
The Market Mosiac: 3 ETFs primed to breakout
WSJ: This company is Nvidia's AI Chip Partner and its Stock is Soaring
John Mauldin: The Science of Cycles
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Top Podcasts of the Week:
Morgan Stanley Thoughts on the Market: Is the Fed Done Raising Rates?
BCA Research: Will the AI rally continue
Real Vision: Tony Greer / Kevin Muir (The MacroTourist)... How to navigate an era of volatile inflation
All-In: Nvidia smashes earnings, Arm walks the plank, M&A market, Vivek dominates GOP debate & more
Looking forward to next week...
Yardeni Research: The economic week ahead August 28 - September 1
Nomura: US Jobs, PCE and ISM
Christophe Barraud: Week ahead preview
Marc to Market: Slowing US Jobs and Softening EMU Inflation
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Thanks you...........
I learned that when I think I'm less Confused, I look at the Markets and I become More Confused....
I think we're going in the right direction......whatever that is ????
LOL !!!!!