15Oct3:08 pmEST

Celebrating the Wrong Thing

As we noted yesterday, both here and with Members, Treasuries went the other way after both the hot CPI yesterday and then the red-hot PPI inflation readings this morning. Bulls have been celebrating what they view as an overdue rally in bonds, as rates finally come back down a bit. However, the key issue is whether the bond market is actually...

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14Oct3:13 pmEST

Recession Trade, Smoke 'em if You Got 'Em

As we noted with Members in last evening's full video recap, there was perhaps no greater sign of complacency from bulls not just about markets but the broad economy when it came to this morning's CPI report. Headed into the report there was a consensus brewing from equity bulls and interest rate doves that even though the main number could...

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13Oct2:57 pmEST

A Dead Ringer

South Korea's KOSPI Composite Index has been having a rough couple of sessions, which reinforces the recent weakness we have seen in the semiconductors, overall, since the KOSPI is essentially highly levered index to AI (or "SI," if you like) these days.  But beyond looking at this weakness in a vacuum, the larger concern is when we put it into...

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12Oct2:16 pmEST

Arbitrage

Consistent with the zeitgeist of this market, last week's headlines speculating on a takeover of Chipotle by Starbucks saw traders embrace the "FOMO" (Fear of Missing Out) in lieu of possible risks such as, oh I don't know, perhaps the whole theory of the M&A between the two firms being a desperate attempt to pacify underwater shareholders,...

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09Oct2:53 pmEST

Afternoon Update 10/09/26 {Video}

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07Oct3:13 pmEST

Out of Tune

Despite some fairly hawkish Fed Minutes this afternoon it appears as though a solid 10-Year auction is sufficient to send rates back below 5.3% as I write this in the final hour. That said, rate-sensitive sectors like the REITs (IYR) and homebuilders (XHB) are not responding in kind to the fade in rates, at least not yet. Regarding the Minutes,...

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06Oct2:57 pmEST

Film Noir Market

One of the central elements of the film noir genre is a fatalistic storyline. Fatalistic is defined as the belief or attitude that all events are predetermined, inevitable, and impossible for humans to change or avoid. Thus, when viewing the price action across markets these days, one cannot help but wonder if we have a fatalistic storyline...

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05Oct2:25 pmEST

MOVE, VIX, Get Out the Way

The Merrill Lynch Option Volatility Estimate (MOVE) Index reflects the level of volatility in U.S. Treasury futures. In effect, the MOVE Index is considered the "VIX" of the bond market, reflecting implied volatility and regimes of higher volatility in general where the bond market is unhinged. In addition to the action in high yield corporate...

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02Oct3:16 pmEST

Afternoon Update 10/02/26 {Video}

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01Oct3:12 pmEST

Even the Groundhog is Tired of This Market

To say that this market has been stuck in a redundant feedback loop which would make Groundhog Day (1993) blush would be the understatement of the century at this point. In particular, each and every single day (and overnight) the tape is bombarded with headlines from Trump, the White House, and various Fed-heads attempting to assuage any...

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