Silly, silly mistake.
Because it didn't happen, everything in the macro outlook, from further treasury issuance (raising rates as demand swamped supply) leading to rising real rates putting a cap on speculative metals to the security (savings) needs of the populace being met allowing a psychological shift from hunkering down to getting on with life to....well, you get the point.
We did have the sense to adjust:
Sept. 2
Starting To Get Nervous About Equities
This is just a heads-up, we are not there yet.
It would be nice to catch the exact top, to bookend March 20's "It's Time To Buy Some Stocks" but getting lucky twice in one move is a longshot....
That was at 3,546.50 on the S&P futures, later that day we got to the all-time high of 3,588.11 up another 42 points before the next day's big kerblooie (technical term)
3,344.60 last and market participants are bruised.*
From Upfina, September 16:
Redbook same store sales growth fell for the 2nd straight week in the week of September 12th. As you can see from the chart below, it fell from -0.1% to -1.2%. This might not be a blip lower. The good news is it’s occurring after the back to school shopping season. The $300 in weekly unemployment benefits could have boosted spending, but now that thesis is dubious. The details are convoluted. It probably won’t have a meaningfully positive impact on spending. The backup plan for the bulls should be to hope for better job creation catalyzed by the Abbott tests which should allow the leisure and hospitality industry to reopen fully.
An early warning sign for US consumer spending? Redbook Index's annual trend appears to be stumbling. The last two weekly data points reflect decline, suggesting that the summer rebound in spending is fading: pic.twitter.com/nlid6YvvM2— James Picerno (@jpicerno) September 15, 2020
There are good and bad aspects to the benefits because each state is facing unique challenges. On the one hand, about 6% of unemployed people don’t qualify for the extra money. That’s because they don’t meet the $100 weekly threshold to get benefits. This doesn’t matter in 9 states where they pay a minimum benefit of $100. On the positive side, as of September 10th, 21 states were paying the $300 out. The best news is workers who haven’t been getting benefits but qualify for them, will get paid back up to $1,800 which is 6 weeks of benefits. Florida is an exception where only 4 weeks of benefits will be paid out.....MUCH MORE
The worst news is the money is already running out....
*See also August 25's
Confirming My Priors: The Next Tradable Correction
....Second, in addition to the heightened concerns from schools moving online, Congress remains gridlocked over the next round of fiscal stimulus. Without it, Wilson thinks "the recovery will almost assuredly roll over, which is why we think there is little chance Congress will fail to execute, especially in an election year....Which to my ears sounds remarkably similar to last week's lament:
So, as Wilson asks, "what's going on?"
....His answer is that the inability of rates to move meaningfully higher is directly related to the hold-up on fiscal policy and growing concerns about schools reopening, and staying open.....
Stocks and Bondage: The Market Is A Cruel Mistress
Our forecast for higher rates on the 10-year has been delayed by politicians arguing about the size of the next covid-19 package.Of course without the bondage.
The expected $1 trillion+ in additional treasury issuance won't happen in what remains of August, at earliest sometime in the first couple weeks of September.
So, despite following the script from August 6's .5040% low yield to August 13's .7270%, the 10-year is back to this morning's .6490% yield.
This also means that commodities that have anti-correlations with rates, especially metals will be trading on fear-n-greed for a while longer before the master plan for world domination facilitated by the short-copper-it's-oversupplied thesis kicks in.....
Or the cruelty.....
