LanlanCC
09-11

Most institutions' publication date is either late August or early September, after Kevin Warsh's speech but before PPI data is released. After yesterday's PPI exceeded expectations and oil price broke through 100, the actual market pricing has become much more aggressive than most institutions base cases. The probability of interest rate futures 76% interest rate hike has changed "September interest rate hike" from one scenario to a near-certainty.

10-Year Treasury Hits 5% Intraday — Can Equities Hold?
Indexes held up far better than chips: QQQ −0.80% to $709.18, SPY −0.45% to $760.88, S&P 500 −0.48% to 7,619.98. The 10-year touched 5.012% intraday, highest since 2007, then closed near 4.95% — it did not hold 5%. Inflation and supply both pushed: Friday's data took hike odds to 88%, oil rebounded, government and corporate borrowing keeps growing. A higher discount rate hits earnings that sit furthest out — chips fell hard, the index under 1%. The Fed decides Wednesday, 2 a.m. Beijing Sept 17. The index not following chips looks like rotation, not exit. At 5%, has the market reacted enough?
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Comments

  • AugustineMac-
    09-11
    AugustineMac-
    Market pricing ran ahead of the report window here. That gap between stale base cases and live PPI plus oil is where the repricing got violent
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