Can somebody tell me why yields rallied? A textbook deflationary day like Friday should have crushed yields.
It can’t because of rate hike expectations because otherwise the 2 yield would have led the way.
It can’t be growth because we’re seeing the worst economic prints since the COVID lockdowns.
It can’t be inflation because everybody says it has peaked?
My thesis is that the market is seeing the energy shitshow in Europe and pricing in higher inflation from energy in the US. The dollar was up 2% this week and oil closed up. Or in other words, there is a possibility we get an even higher CPI in the future.
>My thesis is And what exactly is this thesis based on? What historical comparisons have you done? What models have you run? Oh, none? You just read algo-generated dopamine drip Skinner box social media feeds all day? "Thesis" disregarded.
Chase Cook
Europeans are so fucking pathetic, can’t even take a hot shower? All politicians deserve a terrible fate. Not only can you not afford a shower but your financial situation is so superb you’ll bring in the entire MENA region for immigration, nice!
Daniel Allen
bonds vastly outperform equities during growth slowdown periods
are you 18?
Nothing I posted is incorrect, it is all empirical fact. Bond yields are influenced by growth and inflation expectations. Another fact. So, when bond yields go down when we see growth skid to a halt (another observable fact, and historically inverse to the relation the two have had for decades) the risk market isn't pricing something in that the bond market is sniffing out.
Gasoline is up over 10% from its recent lows. Natural gas is pushing ATHs, oil refuses to stay below 90 with supposedly "hard recession" economic data points (see: NY state fed manufacturing), all while the dollar is threatening to take out its 20 year high. Yeah, this thread has served its purpose, I'm right. The market must now price in a tail event of the August CPI being greater than July's, or the extinction of the "Fed pivot" narrative.
Go back to managing your 11k crypto portfolio
Asher Young
1. CPI has peaked. It will not pass 10% this cycle 2. Fed has stated over and over they do NOT follow CPI, they have their own preferred metrics. 3. Oil is going to shit for the rest of the year and beyond. We're running face first into a deflationary crunch at the start of next year. 4. Bond traders are lazy retards, 2022 has shown them up to be the larpers they always were. Thanks for making this thread, it's good to see what midwits are betting on.
Adrian Perez
Today, I'm going to the bank in 2 hours to buy enough 4 week T-Bills to print free money every month. #cashgang
Bond rates go up when people aren't buying bonds. Bonds may historically do well when equities are stressed but so has gold and the market doesn't reflect that happening either.
Charles Long
>CPI has peaked. It will not pass 10% this cycle
based on your feelings. Bet you thought you were a real hot shot calling for a lower CPI when literally 90% of the decline was based solely on the drop of oil from 120 to 90
>Fed has stated over and over they do NOT follow CPI, they have their own preferred metrics
their metrics (core pce) are literally showing inflation broadening, worse than CPI
>Oil is going to shit for the rest of the year and beyond
based on your feelings, not the fact that production worldwide is dropping and robust remains strong during a period of growth slowdown
>it's good to see what midwits are betting on.
really ironic considering all your points are literally the shit they regurgitate on CNBC every day
historically, bonds are the best asset to own during deflationary periods. When the dollar has rallied 2.3% in a week, it's deflation. Simply saying "price no go up cuz no buy" doesn't cut it. People still sold them for a reason. When the fundamentals are all green lights for the long bond trade, something else is taking place that equities haven't realized yet.
>but so has gold
No. Gold goes up when the hiking cycle ends and the dollar begins its drop (Happens every cycle). We aren't there yet. Gold is not a hedge against deflation, obviously since it has an inverse relationship with the dollar.
Jose Cook
Based on every reasonable expectation. US has no energy crisis, EU is right now at the peak of theirs as they are about to meet their winter stockpiles. Any consumer facing industry eg computer hardware has massive excess inventory. Consumption dropping. Spending dropping. There are no inflationary pressures therefore inflation will begin to drop. Your entire "thesis" is that some unexpected black swan will materialize from nowhere to save your ass. Terrible strategy. And btw being a le based CNBC countertradeooor is peak midwit. See: literally any memestock thread.
Caleb Baker
most of our electricity is locally produced so it's not that expensive. problem is with gas (heating). either way, government said they will cover the delta so we don't riot. we'll see if that will really be the case. t. latvia
Ethan Foster
im not going to respond to your post with any more information because you literally just post feelings or "what you think"
>There are no inflationary pressures therefore inflation will begin to drop
core pce went up last report. Again, im really not going to waste time posting with a 85 IQ mouth breather who can't even comprehend what im saying. Post ANY citation or evidence backing your claims
>europe enery has peaked >inflation has peaked >US has no energy crisis
None of these are supported by facts, in fact, the data DISPROVE them. Thus, I will stop responding to the man whose entire portfolio is 8k all in SOXL. And no explanation for the rising long end of the curve has yet to be given by this clown
Europe's gas storage target is 80% by November 1st, they are currently at 76. Enjoy your meme bond play you fucking retard.
Justin Flores
that's the one year forward contract dumb fucking monkey. Are you retarded or something? If what you said had any iota of relevance the contango for euro electricity would have fucking plummeted. Exactly how dumb as shit are you to think the energy futures market hasn't priced in literally three months in advance? Producers have to lock in these rates for the next year. If they can't? They go bankrupt or get bailed out by the government. The tail risk premium has to be priced in for an average to severe winter. US LNG cannot be counted on as their domestic supply is teetering below the 5 year min. What if Russia lowers supply from 20% to 0%? What about next spring/winter?
The futures market is hardly as retarded as your 84 IQ pea brain and realizes that "bro we have enough gas for a mild winter its cool lol" isn't an actual solution.
Jaxson Ramirez
YCC?
Aiden Nguyen
maybe? My only qualm with that is that I believe that higher rates on the long end are the antithesis of what the fed wants. Rising long end with growth slowing is a repeat of what we saw last year when bonds and equities both get crushed, or essentially that the bond market is saying it does not believe inflation expectations are anchored and refuses to be paid higher yields to hold bonds. If the fed loses control of long end yields it has the potential of crashing literally the entire economy through inflated term premia, let alone financial markets, so I would consider it playing with fire.
on the other hand, the fed has been trying for weeks and weeks to crash the market by sending their goons to talk hawkish, and it hasn't been working. Perhaps the fed said fuck it and plans to raise the long end to force stocks lower in a bid to tighten financial conditions and commodities. In this scenario they would stop at the yield they thought would be the highest they could go without damaging the economy (3.2%-3.5%)
I really think the bond market just doesn't believe in powell's ability to combat inflation anymore. I mean the last CPI was driven 80-90% JUST by the drop in gasoline, and gasoline and oil have bottomed meanwhile sticky labor and shelter have kept rising... Is this going to be the 4th time "inflation has peaked" when CPI comes in next month at 9.2?
Jeremiah Scott
Kek what the fuck are you talking about. That's physical storage, did you think 76 was a price? The state of bondies.
Nathan Clark
Dude you’re literally retarded, I don’t mean figuratively. My posts are unironically too advanced for you to understand. I know this is Any Forums, but my condolences
Evan Rogers
Listen, you tried to larp like you know what you're talking about, it didn't work out. Just take your L and do better next time.
