MAD Macro - Your Fired, Just Kidding
Your Fired, I Didn’t Say That
Hassett as Fed Chairman! Make Gold Your New Standard!
Well, that was an interesting couple of hours in the markets yesterday. I think we learned a couple of important things. First, Trump has a Bloomberg terminal in the Oval Office. Second, Trump listens to Scott Bessent.
Scott and Trump Looking At The Bloomberg Terminal Together Yesterday.
Scott, “Boss, look at the five minute bar charts! The dollar is crashing and the yield on the 30yr bond is back above 5%! Oh no, look the dollar has an outside day to the downside and gold has an outside day to the upside. Boss, that’s very bad!”
Trump, “Relax Scott, I can fix this. I never actually said I was going to fire that knucklehead. By the way, Scott that was a good idea, upgrading the Bloomberg terminal to have real time prices. The 15 minute delay was frustrating. Hey Scott, pull up the bitcoin chart.”
Scott, “Great, boss, how are you going to fix it?”
Trump, “Easy, get the press in here and I will just tell them I never said I was going to fire that knucklehead.”
Scott, “Fantastic, the five minute bar charts are very scary.”
I guess we got a taste of what the markets are going to do next May when Trump names Kevin Hassett as the next Fed Chairman. The WSJ has a couple of interesting articles on yesterday’s market tantrum. First, a good article on the history of presidents pressuring the Fed to ease policy, linked here. It’s titled, “What History Tells Us About the Perils of Firing Jerome Powell”. The second article is by the WSJ editorial board, linked here. It’s titled, “Don’t Fire Jerome Powell, Mr. President”.
Markets were stirred but not shaken yesterday. It’s a good thing the Oval Office Bloomberg terminal has real time prices. This morning markets are mixed. The 30yr yield is still above 5% and the curve is steeper but the dollar has recovered yesterday’s losses. We get retail sales and weekly jobless claims this morning.
I added the 30yr yield five minute bar chart Scott was showing Trump. I updated the U.S. Dollar Index, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, spot gold, NYSE Arca Gold Miners Index, bitcoin, Strategy, S&P futures, NASDAQ 99 futures and DOW futures charts below.
The dollar is higher testing the 50 day resistance level again. Interest rates and the curve are unchanged but both are higher from Tuesday.
Crude oil and copper are close to unchanged and gold is lower. The NYSE Arca Gold Miners Index should open lower with gold prices. Bitcoin is lower and Strategy is due to open lower.
S&P, NASDAQ 99 and DOW futures are all close to unchanged.
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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. Index performance is not illustrative of fund performance. It is not possible to invest directly in an index.
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