Summary – A top-down review of interesting calls and comments made last week in Treasuries, monetary policy, economics, stocks, bonds & commodities. TAC is our acronym for Tweets, Articles, & Clips – our basic inputs for this article.
Editor’s Note: In this series of articles, we include important or interesting Tweets, Articles, Video Clips with our comments. This is an article that expresses our personal opinions about comments made on Television, Tweeter, and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Macro Viewpoints & its affiliates expressly disclaim all liability in respect to actions taken based on any or all of the information in this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerance.
1.Markets Last Week
US Indices:
- VIX down 21%; Dow up 3.8%; SPX up 3.5%; RSP up 1.7%; NDX up 4.2%; SMH up 6.7%; RUT up 3%; MDY up 2.6%; XLU 47 bps;
Mega Caps:
- AAPL up 16 bps; AMZN up 6.3%; GOOGL up 6.8%; META up 9%; MSFT up 3.8%; NFLX up 7.4%; NVDA up 9.7%; MU up 87 bps;
Financials:
- BAC up 3.4%; C up 7.5%; GS up 7.83%; JPM up 4.6%; KRE up 4.3%; EUFN up 3.8%; SCHW up 86 bps; APO up 6.2%; BX up 9.3%; KKR up 9.7%; HDB up 3.8%; IBN up 4.2%;
Dollar was down 1.4% on UUP & down 1.5% on DXY:
- Gold down 2.9%; GDX down 3.2%; Silver down 53 bps; Copper up 4.4%; CLF up 6.1%; FCX up 9.4%; MOS down 2.8%; Oil down 13.2%; Brent down 12.8%; OIH down 5.6%; XLE down 4.2%;
International Stocks:
- EEM up 3.1%; FXI up 3.6%; KWEB up 3.8%; EWZ up 1.6%; EWY up 3%; EWG up 4.2%; INDA up 89 bps; INDY up 3.3%; EPI up 3.7%; SMIN up 2%;
Fixed Income:
- 30-year Treasury yield down 6 bps on the week; 20-yr yield down 7 bps; 10-yr down 10.8 bps; 7-yr down 13 bps; 5-yr down 14 bps; 3-yr down 15 bps; 2-yr down 17 bps; 1-yr down 9.8 bps;
- TLT up 1.1%; EDV up 1.7%; ZROZ up 1.2%; HYG up 44 bps; JNK up 21 bps; EMB up 1%; leveraged DPG up 2.6%; leveraged UTG up 2.9%;
As fears of a wider war evaporated, the market fundamentals of low equity positioning became material. Add to that the decline in the US Dollar & Treasury-yields falling hard with 2-yr & 3-yr closing below our own MV-ONR rate of 3.75%. Then add the highly bullish picture ahead of S&P earnings. How bullish was this combination? Look at the closing candle below:
- TrendSpider@TrendSpider – $SPY about to close out a quarterly candle with a range of $135. Q2 2025 was one for the history books. 🎢
Since we used the charts from @themarketear last week to make our point, we thankfully will begin with their updates this week. The most important to us is the trajectory of earnings growth:
- The Market Ear@themarketear – Bottom-up consensus expects 2Q S&P 500 EPS growth will decelerate to 4% year/year. That’s in the price. From there it is a very nice runway of great EPS momentum. Markets love this type of trajectory.
Below is one forward estimate:
- Mike Zaccardi, CFA, CMT 🍖@MikeZaccardi – S&P 500 forward earnings estimate.. right near an all-time high of $282 https://yardeni.com/charts/yri-zoom-presentation-chartbook/
But have investors bought what they need to buy already?
- @themarketear – Positioning – Looking at hedge fund leverage – gross finally pulls back from highs, probably due to option expiry – and nets march higher but far from extreme. Absolutely nothing here that could prevent a further rally. .
And the key, especially with Treasury yields going down:
- @themarketear – So much room to re-lever – US long-short hedge fund ratio is at the 10th percentile (3-year lookback).
And, of course:
- Holger Zschaepitz@Schuldensuehner – It’s all about liquidity: The S&P 500 has hit a new all-time high, fueled by record levels of US money supply.
What do hedge funds buy in these double-stimulus conditions?
- @themarketear- Momentum got momentum – Hedge funds continue to buy the US momentum factor – just like it should be in a rally.
What about looking back to see how the S&P fared after this quarter?
- @themarketear – Here’s what the S&P did after similar V-shaped rallies – The S&P 500 just made a new all-time high. It was down -18% less than 3 months ago. Here’s what the S&P did after similar V-shaped rallies. Short answer: up 100% of the times on a 3-month horizon (6.8%)
Of course, past performance is not reflective of future results. And such momentum could get reversed if many factors change. But factors can change in either direction. For example, @sentimentrader had noted last week that “stocks have become overvalued relative to bonds; –Similar extremes have tended to precede poor multi-month returns in stocks, slightly less so in bonds“.
But bond yields fell hard this past week and stock sectors rallied hard. So @DeanChristians of Sentiment Trader wrote:
- “Both the S&P 500 Technology sector and the Nasdaq 100 closed at new highs, marking their first such milestones following significant drawdowns. In past instances when the Technology sector reached a new high after a one-year low, it continued to rally over the next year 86% of the time. The record is even more compelling for the Nasdaq 100, which has advanced 100% of the time a year after…”
And @jaykaeppel of Sentiment Trader posted the graphic below:
To add the two big pluses,
- Mike Zaccardi, CFA, CMT 🍖@MikeZaccardi – US Dollar Index $DXY lowest weekly settle since Feb 2022; Down another 1.5% last week
And,
- Mike Zaccardi, CFA, CMT 🍖 @MikeZaccardi – An even 4.0 Fed rate cuts priced into the next 12 months https://yardeni.com/charts/yri-zoom-presentation-chartbook/
Rick Rieder of BlackRock reaffirmed the above thesis by saying “… look at the amount of cash sitting out there … globally there is so much money that wants to come into the market … ” .
Then he went on to express his love (ours too) for the front end of the curve and the number of auctions that are being priced at that & at the front end of the curve and added “you create a lot of income using the front & the belly of the curve; keep ticking off income while the equity market is doing its thing“.
Then surprisingly, Rieder gave a gentle vent to his inner Zofran Mamdani & said “you have an economy that is not interest rate sensitive…. the one aspect that you can open the door to rate cutting is housing; the mortgage rate is too high; …. we don’t build enough homes because those companies have to subsidize the mortgage“.
We also saw Dan Loeb refer to a WSJ article Wall Street Journal article explaining that “Mamdani’s rise to fame was fueled by young, white, college-educated New Yorkers who are increasingly frustrated by out-of-control living costs “. If “young, white, college-educated New Yorkers” feel drawn towards Mamdani, what must the young non-white, not college-educated New Yorkers must feel? They can barely afford to live & they keep hearing CNBC feeling giddy about the stock market going to the moon!!!
It appears that the Fed is immune to the pain housing is creating for the majority of Americans. We won’t be surprised if the Fed itself becomes a political issue in next year’s mid-term elections. You already have Bernie Sanders & Alexandra Ocacio Cortez beginning to attack the wrong focus of the current Congress on returns on capital. Will they eventually get to attacking the Fed? Weirdly, attacking the Fed as the singular bastion of income inequality & the highly restrictive housing policies might be the common factor between the Trump base & the Mamdani base.
2. CNBC – the ultimate in contempt of Hindu/Indian traditions?
No one today uses the N-term for a person of Black Complexion in America. That term has been replaced by the simple term Black. To the extent we know, this change began in the 1960s Civil Rights Movement. As the movement to ban the N-term grew, there must have been some in media who remained determined to use the N-term. How were they treated by the leadership of their companies?
The reason we bring this up because CNBC keeps using hateful pronunciations of Hindu/Indian titles of educational & religious significance. Not CNBC as an entire entity but some anchors in particular within CNBC. And CNBC allows them to get away with it.
Type in “Pandit meaning” in Google & you will see an entire list of US dictionaries describe a “Pandit“, as a learned, wise & respected individual of high learning, mainly philosophical. Specifically Collins Dictionary explains the “PANDIT definition in American English” as an individual “in India esteemed for his wisdom or learning: often used as a title of respect. Also: pundit.” There are many families with generations of Pandits focused on learning & education.
The Pandits were recognized via their specific hats which were easily distinguished from hats used by non-Pandits. Below are two examples of Great Pandits in recent history.
The British used the spelling “pundit” to reflect the “a” sound as in “pun“. In other words, it is widely known in circles that hire educated employees that “pandit” is to be pronounced as “pun” (as in humor/wit).
Of course, CNBC & a couple of anchors at CNBC don’t have to care about such niceties. In fact, Scott Wapner went so far this week to pronounce the Pandit term as frying pan-dit or 
-dit. He has been previously made aware of the enormous difference in saying 
-dit and -dit. But apparently he doesn’t care.
Now ask yourselves whether any CNBC anchor, even Scott Wapner, would allow a guest on their shows to use the N-term? Absolutely not, in our opinion. The anchor might protest that the N-term is still being used by Black Americans in their own songs. But CNBC would still penalize the anchor because what an individual Black singer does about himself or herself does NOT permit a CNBC anchor to repeat that “slur” on CNBC’s air.
But CNBC doesn’t seem to care if a horribly racist pronunciation like -dit was used by anchor Scott Wapner instead of the respectful & CORRECT pronunciation Pandit – the pronunciation implicit in the old Brit spelling “pundit”.
And, as we have pointed out on other occasions, Scott Wapner used to make a habit of mispronouncing important or even sacred Indian names on CNBC’s air. He had stopped for awhile. But now he seems to have gone back to his earlier ways. Is that with CNBC’s permission?
Scott Wapner may not care & CNBC might not be aware that many many Hindus-Americans allow White US TV anchors to horribly mispronounce their names for fear of being not re-invited if they protested. That, as sociologists opine, is the huge difference between Hindus & Muslims. May be that is why no Hindu has risen to speak politically with intensity as Zofran Mamdani (son of an Indian-Muslim expat father & a Indian-Hindu mother) has. We would bet that, if Scott Wapner mispronounced either Zofran or Mamdani on CNBC’s air, Mr. Mamdani would immediately correct him on air.
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