Weak stocks, strong gold
September 9, 2025
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–Bounce from early weakness in stocks yesterday, with ESU5 continuing to firm overnight, now close to Friday’s lows. GOOGL relief rally of 8% as its antitrust trial ended without significant penalty (not required to divest Chrome). Gold made a new high and continues to press this morning with GCZ5 above 3600. On August 25 is was 3417, and it’s been a straight green run from there.
–Volume was pretty light but I will just mention a couple of trades: BLOCK sale 20k SFRH6 at 9646.25. Looks new. This reminds me of a few large outright sales after the initial 50 bp ease in Sept 2024, which were home runs. However, the price now equates to around 3.5%, and the Fed is extremely likely to move to 4.0/4.25% at the FOMC in two weeks. A cushion of 50 to 75 bps in the current environment might be enough, but maybe not.
–Buyer of 30k SFRU5 9600c for 1.5, settled there ref 9590.75. I continue to think U5 will settle between 9605 and 9612, but Friday’s payrolls will be a big factor. Slight new cycle high in 5/30 yesterday at 122.7 (3.743/4.97) as bonds tested 5% yesterday.
–JOLTS this morning with Beige Book in the afternoon. JOLTS expected 7400 to 7300 from 7437 last.
–FT has a headline: ‘US Banks could hide troubled loans under new reporting rules.’ Seems to me that’s already occurring, but certainly the Treasury playbook of extend and pretend has only become more integral to US finance. Bill Moreland of BankRegData has been sounding a vocal alarm about loan modifications that mask underlying weakness, but says there’s a chance it works out ok. This is a long interview, but here’s a link:
https://www.youtube.com/watch?v=f93kKmD4jDU
–UK is moving closer to a digital ID. “…a unified mandatory system like the proposed “BritCard” is being considered, there is significant public and privacy group opposition,” Can control your population, but you can’t control your long-end yields….
