The yields on the 2-year Treasury have jumped to the highest since 2007 while the 2s10s curve bear flattened as the market anticipates the Fed to move aggressively to contain inflation.
Bottom-line: CPI Cements 75 BPs for Next Week, Ups Terminal Rate to 4.18%.
The August consumer price data beat estimates. Overnight index swaps price in ~79 bps in rate hikes next week. That compares to ~72 bps ahead of the data. The terminal rate is now expected at 4.18%, according to Fed swaps. That’s versus 4% prior to the data.
The August consumer price data beat estimates. Overnight index swaps price in ~79 bps in rate hikes next week. That compares to ~72 bps ahead of the data. The terminal rate is now expected at 4.18%, according to Fed swaps. That’s versus 4% prior to the data.
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Bottom-line: 물가지표에 당황한 쪽은 이코노미스트 뿐만 아니라 지표 발표 전날인 월요일에만 기술주 상장지수펀드(QQQ)를 26억 달러 규모로 매수한 투자자도 포함됨.
Economists weren’t the only ones caught off-guard by Tuesday’s hotter-than-expected inflation reading: A day earlier, investors were piling into the world’s biggest tech ETF at the fastest rate since February. The $2.6 billion poured into the Invesco QQQ Trust Series 1 ETF (ticker QQQ) on Monday is now set to take an immediate hit after data showed US consumer prices jumped 8.3% from a year earlier, coming in above forecasts. The report triggered a stock slump that looks set to end a four-day rally as traders prepare for more aggressive Federal Reserve tightening.
Economists weren’t the only ones caught off-guard by Tuesday’s hotter-than-expected inflation reading: A day earlier, investors were piling into the world’s biggest tech ETF at the fastest rate since February. The $2.6 billion poured into the Invesco QQQ Trust Series 1 ETF (ticker QQQ) on Monday is now set to take an immediate hit after data showed US consumer prices jumped 8.3% from a year earlier, coming in above forecasts. The report triggered a stock slump that looks set to end a four-day rally as traders prepare for more aggressive Federal Reserve tightening.
Bottom-line: 100bp의 금리인상도 테이블 위에 올라섬.
Tuesday’s unexpectedly hot inflation reading virtually assured markets that the Federal Reserve will raise rates by 75 basis points next week. Wall Street then began to weigh the chance that the Fed might make a more dramatic statement. The odds for a 100 basis point rate hike jumped more than 20% after the consumer price index showed an increase from July. Scott Buchta, head of fixed-income strategy at Brean Capital, said that if the Fed needs to raise rates sharply, it would be best to do so quickly and get it over with. “Seventy-five is most likely, but they should do 100,” he said.
Tuesday’s unexpectedly hot inflation reading virtually assured markets that the Federal Reserve will raise rates by 75 basis points next week. Wall Street then began to weigh the chance that the Fed might make a more dramatic statement. The odds for a 100 basis point rate hike jumped more than 20% after the consumer price index showed an increase from July. Scott Buchta, head of fixed-income strategy at Brean Capital, said that if the Fed needs to raise rates sharply, it would be best to do so quickly and get it over with. “Seventy-five is most likely, but they should do 100,” he said.
US stocks and bonds plummeted, with tech shares bearing the brunt. The S&P 500 dropped 4.3% and the Nasdaq lost more than 5%, with Apple and Microsoft posting their biggest one-day losses since 2020.
Bottom-line: 트레이더들은 종전보다 금리인상 폭을 크게 베팅하고 있음.
That’s not to say rates were immune to today’s surprise. Here’s how fed funds futures traders are pricing the September rate hike, according to Bloomberg’s WIRP function. That’s a roughly 35% probability that the FOMC does 100 bps.
That’s not to say rates were immune to today’s surprise. Here’s how fed funds futures traders are pricing the September rate hike, according to Bloomberg’s WIRP function. That’s a roughly 35% probability that the FOMC does 100 bps.
Bottom-line: 중앙은행의 금리인상 폭에 대한 기대가 높아질수록 기술주, 금에서부터 암호화폐에 이르기까지 실질금리에 밸류에이션이 민감한 자산군들이 타격을 입으며 올해의 성과를 더욱 나쁘게 몰아넣을 수 있음.
Goldman Sachs Group Inc.’s Christian Mueller-Glissmann has a simple takeaway for clients on that latest inflation shock: Wall Street’s bad year is set to get worse. While the Fed is likely happy that the bond market is finally heeding its hawkish message, it’s another matter for investors in a slew of rate-sensitive investing strategies from technology stocks and gold to crypto. “The high and sticky inflation increases the risk that more central bank tightening might be required, which could mean even higher real yields,” said Mueller-Glissmann. “This would put further downward pressure on valuations across assets, especially if those higher yields increase growth risks.”
Goldman Sachs Group Inc.’s Christian Mueller-Glissmann has a simple takeaway for clients on that latest inflation shock: Wall Street’s bad year is set to get worse. While the Fed is likely happy that the bond market is finally heeding its hawkish message, it’s another matter for investors in a slew of rate-sensitive investing strategies from technology stocks and gold to crypto. “The high and sticky inflation increases the risk that more central bank tightening might be required, which could mean even higher real yields,” said Mueller-Glissmann. “This would put further downward pressure on valuations across assets, especially if those higher yields increase growth risks.”
Bottom-line: 흥미로운 국면이지 않을 수 없는데, 투자자들은 100bp에 가까운 금리인상을 베팅하는 동시에 이런 큰 폭의 금리인상이 이번 사이클의 정점을 만들 것이라는 베팅(2023년 금리인하) 또한 하고 있음.
Even as stocks and bonds tanked in the wake of the upside CPI surprise, the seeds were being nurtured for similar episodes. Markets still expect the Fed to pivot sooner rather than later, no matter how aggressive the anticipated immediate response ends up being to the latest evidence of sticky inflation. The Nasdaq 100 dropped 5.5% as rates traders signal there’s a chance for a full-percentage point hike next week. This was a relatively straightforward response, given the optimistic rallies of the past week. However, eurodollar futures also increased their expectations for rate CUTS next year. Sure, that underscores expectations the Fed’s initial reluctance to hike means it now has to move rapidly enough to almost certainly deliver a recession. But, it also means investors may again bet that each jumbo hike is more and more likely to be the last one before a dovish pivot. How well have those wagers worked out lately?
Even as stocks and bonds tanked in the wake of the upside CPI surprise, the seeds were being nurtured for similar episodes. Markets still expect the Fed to pivot sooner rather than later, no matter how aggressive the anticipated immediate response ends up being to the latest evidence of sticky inflation. The Nasdaq 100 dropped 5.5% as rates traders signal there’s a chance for a full-percentage point hike next week. This was a relatively straightforward response, given the optimistic rallies of the past week. However, eurodollar futures also increased their expectations for rate CUTS next year. Sure, that underscores expectations the Fed’s initial reluctance to hike means it now has to move rapidly enough to almost certainly deliver a recession. But, it also means investors may again bet that each jumbo hike is more and more likely to be the last one before a dovish pivot. How well have those wagers worked out lately?
Bottom-line: 페라리 정도 되어도 끊임없이 확장한다.
Ferrari NV unveiled its long-awaited 390,000-euro ($390,195) Purosangue crossover that will haul the supercar maker into a new era of broader appeal. The company’s most utilitarian model in its 75-year history — with four doors, four seats and a 473-liter (125-gallon) trunk — will hit showrooms next year. Ferrari exudes confidence about the Purosangue fitting that denoscription, and is offering a surprise answer to one question: So is it a sport utility vehicle or not? “Please don’t call it an SUV, because it isn’t,” Chief Executive Officer Benedetto Vigna told reporters in Maranello, northern Italy. “It’s a Ferrari.”
Ferrari NV unveiled its long-awaited 390,000-euro ($390,195) Purosangue crossover that will haul the supercar maker into a new era of broader appeal. The company’s most utilitarian model in its 75-year history — with four doors, four seats and a 473-liter (125-gallon) trunk — will hit showrooms next year. Ferrari exudes confidence about the Purosangue fitting that denoscription, and is offering a surprise answer to one question: So is it a sport utility vehicle or not? “Please don’t call it an SUV, because it isn’t,” Chief Executive Officer Benedetto Vigna told reporters in Maranello, northern Italy. “It’s a Ferrari.”
Bottom-line: 자산배분에서 그동안 채권보다 주식을 선호하던 논리가 매수를 지지했다면, 배당수익률보다 국채수익률이 +1.8%p로 2011년 이후 최고치를 기록함에 따라 그 논리는 힘을 잃을 것으로 보임.
The TINA (There Is No Alternative) mindset that has been dominating asset allocation over the past few years, favoring equities over bonds, is clearly gone now as bond yields look more attractive. The spread between the US 10-year Treasury yield and the S&P 500 Index forward dividend yield has now reached 1.8 percentage points, the highest level since 2011, as stubborn inflation is pushing the Federal Reserve to raise interest rates aggressively, while risks of recession are weighing on dividend expectations. According to the Bank of America Corp. global fund managers survey, net allocation to stocks has fallen to the lowest level on record in September.
The TINA (There Is No Alternative) mindset that has been dominating asset allocation over the past few years, favoring equities over bonds, is clearly gone now as bond yields look more attractive. The spread between the US 10-year Treasury yield and the S&P 500 Index forward dividend yield has now reached 1.8 percentage points, the highest level since 2011, as stubborn inflation is pushing the Federal Reserve to raise interest rates aggressively, while risks of recession are weighing on dividend expectations. According to the Bank of America Corp. global fund managers survey, net allocation to stocks has fallen to the lowest level on record in September.
Bottom-line: US Stocks Post Modest Gains as Dip Buyers Emerge.
Stocks regained surer footing as a semblance of calm returned to markets on Wednesday, following a brutal selloff sparked by hotter-than-expected inflation. The dollar fell with Treasuries. Both the S&P 500 and Nasdaq 100 ticked higher after a measure of producer-prices fell for a second month in August, in line with economists’ expectations. Shares had their biggest drop in more than two years Tuesday after shock consumer-price data prompted investors to reassess the outlook for interest rates.
Stocks regained surer footing as a semblance of calm returned to markets on Wednesday, following a brutal selloff sparked by hotter-than-expected inflation. The dollar fell with Treasuries. Both the S&P 500 and Nasdaq 100 ticked higher after a measure of producer-prices fell for a second month in August, in line with economists’ expectations. Shares had their biggest drop in more than two years Tuesday after shock consumer-price data prompted investors to reassess the outlook for interest rates.