July 28. US stocks finally took a tumble as the debt ceiling impasse lingers…
July 28. US stocks finally took a tumble as the debt ceiling impasse lingers, with SP500 down 1.6% but Nasdaq down 2.7%.
–There were some large buyers of deferred midcurve calls, some as block trades and some in pit. E2Z 9862c were bought 20k from 17.0 to 18.5 (EDZ3 underlying, settled 9837). E3Z 9762c bought in size of 15k from 20-21 (EDZ4 underlying). The latter was interesting because there hasn’t been a blue midcurve traded in months, at least for any size.
–News today includes Jobless Claims expected 425k and 7 year auction.
–Yesterday’s 5 year auction was mediocre. Beige Book reported weakness in 8 of 12 districts, but blamed weather, Japan, flooding.
–Front end of dollar curve is trading heavy. Several news articles are warning of turmoil in the repo market if budget negotiations aren’t resolved.
–The following two snippets sum up problems with the US budget in one area…health care. (Reuters) – The U.S. health bill will account for 19.8 percent of the nation’s spending by 2020, up from 17.6 percent in 2009, (WSJ) Almost half the nation’s health-care spending will come from government coffers by 2020, up four percentage points from 2010, according to new federal spending figures.
