My side-ways to lower into 2020 market call has some merit if projecting out supply chain shocks and employment trend data. SamanthaLaDuc
On Yields and MOVE
Interest Rate volatility has been picking up steam, outpacing credit and equity volatility of late – reaching the highest levels in over 2yrs. Another words: as both Volatility on both Long and Short ends of the yield curve rise, expectations rise for a big $MOVE.
My Fed guesses – and they are just that:
Although the stage is set for the Fed to cut rates, policy makers won’t have sufficient data to act until the end of the summer. A move at the September meeting is a reasonable baseline at this point. If the data deteriorate more quickly, or if markets seize up, pull that cut forward into July. If trade tensions ease and growth stays strong, push it back. Tim Duy
“Every time the Fed shifts to a more dovish policy stance, the greater the markets’ demand”
How long can markets maintain increasingly elevated asset prices that are decoupled from the underlying economic and corporate fundamentals? Given the remarks this week of Fed officials, it seems no longer a question of whether the Fed will cut rates but rather when and by how much. But there is a deeper two-part question that remains unanswered, and it’s much more consequential: Would such cuts even lead to sustainably and substantially higher consumption and investment; and, if not, how long can markets maintain increasingly elevated asset prices that are decoupled from the underlying economic and corporate fundamentals?
…dynamics feeding into a “negative supply shock” is the closest thing to recession risk the U.S. faces right now, a scenario that would create different dynamics than the last two recessions.
There’s a risk for a self-fulfilling cycle of market instability and economic disruptions…their willingness to underwrite so much liquidity risk in the last few years, and to structurally embed it in the system via a proliferation of ETFs and other instruments, increases the risk of heightened internal financial instability that could spill back into the economy.
There is a threat of protracted economic global slowdown given recent data and lingering trade wars and their impacts from tariffs.And that loss of global momentum may have helped fuel our market advance (cleanest shirt in the laundry) but risks are the threat “throws some countries into recession, ignites debt concerns in some advanced and emerging economies, and fuels additional market instability through liquidity air pockets.Investors Could Tip the U.S. Economy Against Themselves – Mohamed A. El-Erian
A global trade triggered slowdown is causing investors to hide out in US assets (S&P 500, Treasuries, USD). We believe a capital flood out of the US is on our doorstep. Larry McDonald
The US PPI figure, UK jobs report
02:00 CNY China Retail Sales/Industrial Production
02:00 CNY China NBS Press Conference
12:30 USD US Retail Sales (Control Group p0.0%)
13:15 USD US Industrial Production (MoM)
14:00 USD Michigan CSI (prelim) (e98.1 p100.00)
#earnings scheduled for the week $LULU $THO $AVGO $UXIN $HRB $RH $PLAY $HDS $FGP $LOVE $CHS $TLRD $SECO $DLTH $SHLO $ASNA $CPST $JW.A $AZRE $ADXS $CASY $LMNR $BBCP $NEPT $OXM $SPCB $DEST $TMDX $CBKC $TUFN $LIVX $RENN $SMMT $CRWS $UROV $CUP https://t.co/lObOE0dgsr pic.twitter.com/ZGuDbPh1HN
— Earnings Whispers (@eWhispers) June 8, 2019