What a Beautiful Day

With rates on the long bond (30-year T-bond) hitting nineteen year highs today, and getting a fair amount of media coverage for doing so, market players are finally starting to realize that The Fed only controls the overnight (or Federal Funds Rate), at least for the time being. In a similar vein, Treasury Secretary Scott Bessent's recent comments suggesting he would do what he needed to in order for rates to stay contained has not been initially well-received by the bond market, as words alone are not as likely to work due to the law of diminishing returns. In addition, rates around the world in the developed economies like Japan are on the rise, pressuring those other central banks. 

Here in America, buyers are still rotating back into the semiconductors, with the underlying bull thesis being the recent underperformance by the SMH is merely another in a long line of buying opportunities. We have ADI earnings this week. But, for the most part, this week's earnings focus is on major retail names as we wait for NVDA on August 26th. 

Oil and gold miners are other standout assets today, as the inflation trade looks very much alive and well. 

Overall, some of the short ideas we have noted with Members for a while now are looking like fresh breakdowns in play today, namely META and NKE. Higher rates and higher oil/gasoline clearly run contrary to what the White House wants, despite the resilient buyers in the SMH.