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.
Bottom-line: 소비자물가와 생산자물가의 차이는 기업의 이윤을 가늠하는데 널리 사용. 이 차이가 대확산 시기 전례 없는 이윤을 남기게 해줬다면, 이제는 기업 이윤의 추가적인 감소를 암시하고 있음.
Today’s producer price report confirmed the nascent fall in profit margins will only get worse. Last year saw a historic rise in firms’ profit margins as they took advantage of the unprecedented mismatch between supply and demand in the wake of the pandemic. A simple proxy for profit margins is the difference between PPI and CPI. Early in the pandemic, PPI rose faster than CPI, and producers used input price increases to raise their profit margins. But as consumer costs rise and broaden, consumers will become more squeezed, eventually forcing firms to ease their margins. The gap between PPI and CPI is closing at a faster rate, indicating that profit margins will continue to fall. This will be an ongoing headwind for equities, along with the drop in mulitples and falling revenues as the economy slows.
Today’s producer price report confirmed the nascent fall in profit margins will only get worse. Last year saw a historic rise in firms’ profit margins as they took advantage of the unprecedented mismatch between supply and demand in the wake of the pandemic. A simple proxy for profit margins is the difference between PPI and CPI. Early in the pandemic, PPI rose faster than CPI, and producers used input price increases to raise their profit margins. But as consumer costs rise and broaden, consumers will become more squeezed, eventually forcing firms to ease their margins. The gap between PPI and CPI is closing at a faster rate, indicating that profit margins will continue to fall. This will be an ongoing headwind for equities, along with the drop in mulitples and falling revenues as the economy slows.
US stocks rebounded in late trading a day after CPI data sent shares reeling. The S&P 500 eked out a 0.3% advance after whipsawing between gains and losses as investors weighed the Fed's next move. Treasuries were mixed, keeping 10-year yields hovering around 3.41%.
Bottom-line: 레이 달리오는 인플레이션 통제를 위해 정책금리를 충분히 더 올려야 할 것이며, 이는 민간 부문의 소비, 경제 둔화를 야기하는 신용 성장 하락을 이끌 것. 정책금리를 4.5% 수준으로 올리는 것만으로도 주가지수는 20% 가까이 하락시킬 수 있다고 함.
Ray Dalio came out with a gloomy prediction for stocks and the economy after a hotter-than-expected inflation print rattled financial markets around the globe this week. “It looks like interest rates will have to rise a lot (toward the higher end of the 4.5% to 6% range),” the billionaire founder of Bridgewater Associates LP wrote in a LinkedIn article dated Tuesday. “This will bring private sector credit growth down, which will bring private sector spending and, hence, the economy down with it.”. A mere increase in rates to about 4.5% would lead to a nearly 20% plunge in equity prices, he added. The rate market suggests traders have fully priced in a 75-basis-point hike next week by the Federal Reserve, with a slight chance for a full percentage point move. Traders expect the Fed fund rate to peak at about 4.4% next year, from the current range of 2.25% and 2.5%.
Ray Dalio came out with a gloomy prediction for stocks and the economy after a hotter-than-expected inflation print rattled financial markets around the globe this week. “It looks like interest rates will have to rise a lot (toward the higher end of the 4.5% to 6% range),” the billionaire founder of Bridgewater Associates LP wrote in a LinkedIn article dated Tuesday. “This will bring private sector credit growth down, which will bring private sector spending and, hence, the economy down with it.”. A mere increase in rates to about 4.5% would lead to a nearly 20% plunge in equity prices, he added. The rate market suggests traders have fully priced in a 75-basis-point hike next week by the Federal Reserve, with a slight chance for a full percentage point move. Traders expect the Fed fund rate to peak at about 4.4% next year, from the current range of 2.25% and 2.5%.
Bottom-line: 제이피모건은 중앙은행이 9월 100bp 금리인상을 할 확률이 1/3 미만이라 보고 있으며, 훌륭한 운전자라면 목적지 앞에서 더 가속하지 않는다고 의견을 밝힘.
Federal Reserve officials are unlikely to raise interest rates by a super-sized 100 basis points when they meet next week, according to JPMorgan Chase & Co. chief US economist Michael Feroli. “We think the odds of a 100 basis-point move -- though certainly not zero -- are lower than a third,” he wrote in an note to clients Wednesday. “Good drivers don’t increase their speed as they get closer to their destination.”. Investors fully expect a 75 basis-point increase when Fed officials gather Sept. 20-21 and see a roughly one-in-three chance they will opt for the bigger move, according to pricing in federal fund futures contracts. That’s after core US consumer inflation came in at a much-hotter-than-forecast 0.6% in August compared with the prior month.
Federal Reserve officials are unlikely to raise interest rates by a super-sized 100 basis points when they meet next week, according to JPMorgan Chase & Co. chief US economist Michael Feroli. “We think the odds of a 100 basis-point move -- though certainly not zero -- are lower than a third,” he wrote in an note to clients Wednesday. “Good drivers don’t increase their speed as they get closer to their destination.”. Investors fully expect a 75 basis-point increase when Fed officials gather Sept. 20-21 and see a roughly one-in-three chance they will opt for the bigger move, according to pricing in federal fund futures contracts. That’s after core US consumer inflation came in at a much-hotter-than-forecast 0.6% in August compared with the prior month.
Bottom-line: 인플레이션이 일시적일 것이란 기대는 비단 주식 투자자 뿐만 아니라 채권 투자자도 동일하게 가지고 있음. 현재 책정 된 수준의 인플레이션 기대(1년 내 2% 대로 하락)가 현실화 되려면 2008년 금융위기 당시 소비자물가지수가 7.7%p 하락한 것보다 더 빨리 물가가 안정되어야 함. 또한 실업률 4%에서 파월이 침체를 우려할지도 의문인지라, 이런 투자자와 중앙은행 간 단절들이 다음 주 시장의 변동을 확대 시킬 여지가 있음.
Equities look to have shrugged off the hot August CPI print. That sets up next week’s Fed meeting as a truly fascinating collision between investors convinced that little more is needed to tame inflation and policy makers who have been adamant they have plenty yet to do. Will Jerome Powell come out in less than a week’s time and signal a slowdown, despite accelerating core inflation and a jobless rate substantially under 4%? Mind you, it’s not just stock investors who are displaying confidence that inflation will prove “transitory.” So do bond investors. The breakeven rate signals fixed-income investors are betting annual CPI will come crashing down to average close about 2% over the coming 12 months. That would require an even faster collapse in inflation than the 7.7-point drop for CPI in the 2008 recession. It seems clear that inflation expectations have gone way too low as soon as the Fed started hiking rates in March, given the way the 12-month average for actual CPI kept rising. That disconnect could cause fresh market turmoil next week when the Fed meets.
Equities look to have shrugged off the hot August CPI print. That sets up next week’s Fed meeting as a truly fascinating collision between investors convinced that little more is needed to tame inflation and policy makers who have been adamant they have plenty yet to do. Will Jerome Powell come out in less than a week’s time and signal a slowdown, despite accelerating core inflation and a jobless rate substantially under 4%? Mind you, it’s not just stock investors who are displaying confidence that inflation will prove “transitory.” So do bond investors. The breakeven rate signals fixed-income investors are betting annual CPI will come crashing down to average close about 2% over the coming 12 months. That would require an even faster collapse in inflation than the 7.7-point drop for CPI in the 2008 recession. It seems clear that inflation expectations have gone way too low as soon as the Fed started hiking rates in March, given the way the 12-month average for actual CPI kept rising. That disconnect could cause fresh market turmoil next week when the Fed meets.