Then suddenly
August 2, 2024
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–Monster day yesterday, as ten year yield plunged 13 bps to 3.975%, first time under 4% since the beginning of February. ISM Mfg quite weak at 46.8, with the employment component at just 43.4. Jobless Claims 249k, appears to be trending decisively higher. Near SOFR calendars made new lows while reds to more deferred made new recent highs. The most inverted 1-yr continues to be front SFRU4/SFRU5 which sank 14.5 to -148.5 (9504.5/9653). However, U5/U6 rose 6.5 bps to -24.5; previous 20-day range had been -26 to -37. Which is to say that reds outperformed on the curve. SFRM5 was the strongest contract, +23.5 to 9633.5. On the treasury curve, 2/10 did NOT make a new high, closing at -18 but 5/30 did, up 6 to +42.8.
–Weakness in equities with SPX -1.4% and Nasdaq Comp -2.3%. Continued selling this morning attributed to AMZN and INTC earnings, as good of an excuse as anything. This isn’t even much of a retracement, considering the move from late April to mid-July.
–Employment report this morning. Pretty clear that the Fed has shifted concern to jobs. NFP expected 175k…we just don’t know if that will come with a positive or negative sign!
–August is vacation month, when not much is expected to happen. However, a friend related a story yesterday of being away in August 2015…when China decided to devalue.
