Oh, we got both kinds, country AND western
July 19, 2024
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I don’t like country music, but I don’t mean to denigrate those who do. And for the people who like country music, denigrate means ‘put down’.
-Bob Newhart, passed at age 94
–Treasury yields rose despite a continued pullback in stocks. Tens up 4.6 bps to 4.188%. SPX down 44 or 0.8%. On the SOFR strip reds thru golds were down 3.5 to 5 (1 to 4 years forward). The peak contract on the strip is SFRH’27 at a price of 9654, right around 3.5%.
–No economic data of consequence today, but it is July equity option expiration. Beware the gamma vortex. Also, a global tech outage has disrupted airline, media and banking operations this morning. We’ll just call it a ‘glitch’. TRADE RECOMMENDATION: Buy some candles, canned goods and a good paperback; more of this is on the way.
–A couple of interesting snippets.
BBG headline: Texas’ Biggest Pension Fund to Pull Almost $10 Billion from Private Equity.
WSJ by Greg Ip: Why the Fed Should Cut Rates Now – Not Wait Until September
The next FOMC is in 12 days, July 31. August Fed Funds settled 9468, indicating less than 5% chance of an ease at the July meeting, while FFV4 at 9492.5 has fully priced a September cut. It would take something pretty gosh-darn outlandish to make the Fed move in July. However, if anyone should notice Austin Private Wealth buying FFQ4, let me know.
[just prior to last weekend, an SEC filing dated July 12 showed Austin PW reporting a new put position representing a short of 12 million DJT shares. Clerical error. I said, IT WAS A CLERICAL ERROR]
Anyway, it’s now all about the labor market, and Jobless Claims rose to 243k yesterday. Payroll data is released to you and me on August 2, two days after the FOMC, but there have been instances, through clerical error of course, where some market participants randomly received the data early. Now the drama shifts to who Kamala Harris will choose as a running mate…
