Moo Moo Buckaroo

A mere one trading session after the Treasury announced support for the long end of the curve yesterday we have Treasuries lower today as rates on the 10-Year out to the 30-Year move back higher. Beyond that, Treasury Secretary Bessent is out and about with tons of comments about, perhaps, raising the amount of buybacks to support said long bond. 

Naturally, like a game of poker this all seems like a "tell." And the pertinent issue is whether you view the Treasury as operating from a position of strength or weakness. True, the Dollar is still King in a Dollar-dominated world as the world's reserve currency--There is no doubt about that. History suggests the Dollar will eventually be ousted as the reserve currency. But that is likely be a painful and tedious process which can play out over decades and almost assuredly will see most other countries suffer a far worse fate, at least initially, than America. 

In the meantime we have what seems to be a response from the bond market which is downright humiliating for the White House, given the magnitude and unique nature of yesterday's announcement. Thus, I view Bessent's action as coming from a position of fear and weakness regarding the bond market's current predicament. 

Also note gold miners and oil pushing higher nicely again today as even gold bullion itself flipped red to green. The agribusiness plays, gauging the MOO ETF monthly hart, below, continue to firm up with an attractive and tight bull flag as the soft commodities themselves have been rallying of late.

Indeed, the ag stocks may very well be the next sector to uncoil higher as both The Fed and the White House/Congress are way too dovish compared to what is required in this macro backdrop (austerity and higher rates) in order to effectively crush inflation.