MAD Macro - Well, in Philadelphia it's Worth 50 Bucks
John Fetterman Needs to go Shopping
But it’s a Rochefoucauld World Complication Watch
John Fetterman needs to put big boys pants back on. Mitt Romney and Joe Manchin actually passed a bipartisan rule for the U.S. Senate last night. Sadly, it’s not a new budget. They are making John Fetterman put his pants back on. It’s unclear where the NYT stands on the subject. They think Joe Manchin is a Republican and they pointed out that Mitt went to prep school. So I assume the NYT thinks hoodies were a good idea for the U.S. Senate. There was a big development in the new team shoplifting sports league. Team Philly, where a Rochefoucauld World Complication watch is worth 50 bucks, took a late season lead in the standings. John Fetterman must be proud that his state is back in the lead, but he can’t support the team by wearing the team uniform to work. In Philly, the team went for the easy stuff. Watches are no good for anything in the digital world. They hit the Apple and Lululemon stores in Rittenhouse Square. The bold team effort put Philly in a commanding lead.
It looks like the U.S. government is going to shut down this weekend. Moody’s has threatened to downgrade the U.S. credit rating. They are the last rating agency giving the U.S. government debt the top rating. Maybe that’s why the U.S. yield curve has been sharply steepening this week. The U.S. yield curve normally steepens just before the economy goes into a recession. But this is a little different, it’s a bear steepening. When the economy is entering a recession the Fed starts to ease policy and short rates fall faster than long rates, a bull steepening. A bear steepening is not good, it’s like crossing the streams.
Markets are mixed today after a volatile mixed day yesterday. Gold took a hit yesterday as 10yr yields rose sharply to new highs above 4.60%. The dollar made new highs which is odd if the U.S. is about to be downgraded. WTI crude oil rallied sharply yesterday and tested the $95 level overnight.
I updated the U.S. Dollar Index, U.S. 10yr yield weekly, U.S. 10yr-2yr yield spread, WTI crude oil, spot gold, bitcoin, S&P futures, S&P cash and NASDAQ 100 futures charts.
I still believe the U.S. dollar will turn lower and is completing an irregular #2 wave correction in an ongoing bear market. Not a good idea to pick tops, only George Costanza would try that, but I think the dollar will top out soon. Maybe a downgrade will do the trick. U.S. 10yr yields are rising quickly this week and the curve continues to bear steepen.
WTI crude oil is testing the $94-$95 level. I think it will eventually break through and finish the year above $100. Spot gold sold off sharply yesterday and is unchanged today. Bitcoin is trading in a narrowing range.
S&P and NASDAQ 100 futures are unchanged today after a choppy day yesterday. I included the S&P cash today because when looking at longer term charts futures can be a little distorted from the forward curve. The S&P cash tested an important trendline to the tick yesterday. A close below the trendline could trigger heavy technical selling.
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Unless otherwise stated, Bloomberg is the source of all data and charts.
S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors.
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