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
Fixed Income:
- 30-year Treasury yield down 9.1 bps to 4.679% on the week; 20-yr yield down 6.7 bps to 4.646%; 10-yr down 2.9 bps to 4.062%; 7-yr up 0.5 bps to 3.814%; 5-yr up 2.9 bps to 3.63%; 3-yr up 3.3 bps to 3.529%; 2-yr up 3.2 bps to 3.56%; 1-yr down 0,2 bps to 3.667%;
- TLT up 1.5%; EDV up 2.8%; ZROZ up 3%; TMF up 4.3%; HYG up 7 bps; JNK up 18 bps; EMB up 52 bps; leveraged DPG up 40 bps; leveraged UTG up 2.1%;
Related charts.
- Mike Zaccardi, CFA, CMT 🍖@MikeZaccardi – US inflation is right near 2% when using real-time shelter price data. Via @JeremyDSchwartz @WisdomTreeFunds
And,
- Mike Zaccardi, CFA, CMT 🍖- @MikeZaccardi – GS: We Now Estimate That the Underlying Pace of Job Growth Has Decelerated to About 25k Jobs/Month, Below Our Estimate of the Breakeven Rate of Around 70k Jobs/Month
Is that why?
- Mike Zaccardi, CFA, CMT 🍖@MikeZaccardi – Bond market up 5 weeks running… into the Fed meeting
Stocks:
- Dow up 95 bps; SPX up 1.6%; RSP up 28 bps; NDX up 1.9%; SMH up 3.8%; RUT up 25 bps; MDY down 38 bps; XLU up 2.4%; VIX down 3%;
- BAC up 1.6%; C up 4.2%; GS up 5.7%; JPM up 4.3%; KRE down 70 bps; EUFN up 2.4%; SCHW up 1.6%; APO up 4.9%; BX up 6.7%; KKR up 5.8%;
The up week was made on Thursday’s big up-day which featured the desired Nirvaan – Jobs data weaker but positive & lessening of both extremes of concern. It was the day that Banks & Brokers rallied the most & hardest.
- Seth Golden@SethCL – Friday – Yesterday’s 83% UVOL was best breadth day since August-end, NYSE Common Stock Only A/D made new ATH. NYSE itself has a lot of non-U.S. stocks, bond funds and other non-stocks, which is why $NYA Common Stock Only version is a truer measure of market breadth. Rally on Wayne! $SPX $SPY $ES_F $IWM $QQQ $DIA $SMH $AAPL $VOO
Bonds & Stocks could prove positive & “stocks will love it”!
- Jim Paulsen@jimwpaulsen – Sep 12 – A Fed ease will be BIG for the stock market. This is the only Bull mrkt in post-war history which has lived its entire existence with negative excess financial liquidity and with an inverted yield curve. This is about to change and #stocks will love it! http://PaulsenPerspectives.Substack.com
That brings us to the only stocks that seem to matter:
- AAPL down 2.3%; AMZN down 1.8%; GOOGL up 2.5%; META up 42 bps; MSFT up 3%; NFLX up 3%; NVDA down 4.5%; AVGO up 7.5%; MU up 20.4%; ORCL up
Speaking of semis:
- Mike Zaccardi, CFA, CMT 🍖@MikeZaccardi – A couple nice weekly $SMH candles ATH
The liquidity boom aura shone in the below as well:
Dollar was down 4 bps on UUP & down 16 bps on DXY:
- Gold up 99 bps; GDX up 5.1%; Silver up 3%; Copper up 2.5%; CLF up 2.6%; FCX down 3.5%; MOS up 3.7%; Oil up 77 bps; Brent up 1.7%; OIH up 98 bps;
International Stocks:
- EEM up 3.6%; FXI up 4.1%; KWEB up 5.7%; EWZ up 1.4%; EWY up 6.8%; EWG down 7 bps; INDA up 1.3%; INDY up 1.2%; EPI up 1.2%; SMIN up 1.2%;
On the other hand,
- Bespoke@bespokeinvest – Extreme Overbought – https://bespokepremium.com/interactive/posts/think-big-blog/extreme-overbought via @bespokeinvest
And,
- The Market Ear@themarketear – Sep 12 – You buy protection when you can…
2. Signals about the Markets & Economy
The FOMC in its prepared statement & Chair Powell in his presser on the coming Wednesday will no doubt say something about what they see happening in the US economy. This past week we saw & heard many “professionals” articulate their views about the economy from their viewing angles. Broadly speaking, those signals were from two angles – one from what financial markets are signaling & the other from what they see in jobs and the economy.
One 3-hour show last week featured the two different views & angles that impressed us. That show was Bloomberg Surveillance on Tuesday 9-9-2025. The clip of this entire show in on YouTube at https://www.youtube.com/watch?v=Twe-MR0Ae88. Allow us to begin with Amanda Lyman, Head of Macro Credit at BlackRock at minute 1:19:26 when she said in her exceptionally smart gentle manner – “we are very respectful of the softening in the labor market that has been materializing“. Then she went on to say:
- “… the Fed views its current stance as moderately restrictive; there is not enough room for them to cut by 50 bps in our view; … I think the way we view this the Fed wants to get ahead of a material kind-off non-linear deterioration in the labor market. we anticipate that the Fed’s rate cutting cycle will ultimately resemble normalization cuts to lessen the degree of the restrictive stance; … If you look at a variety of risk assets, they would tell you… there is an opportunity cost to being defensive in this market; there is an overhang but we are pretty constructive on risk assets & December is a favorable month for corporate credit ”
As Ms. Lyman said, her view comes from looking at a variety of risk assets & what they signal for risk assets in corporate credit. She has absolutely zero responsibility to think about the weaker sectors of the economy & what they might be signaling. Her calendar timeframe is until year-end 2025.
Allow us to sidetrack this stream & highlight what Rick Rieder, Ms. Lyman’s colleague at BlackRock, said on CNBC on Tuesday afternoon:
- “half the country is having a hard time… if you strip out health-care, you get a negative labor rate … I think they should cut 50 bps but they are going to cut 25 bps; … the neutral rate is less than 3%; can get to at least neutral“.
Allow us to state in candor that the Macro Viewpoints ONR (Over-Night-Rate) is now at 3.25% after a 50 bps cut from 3.75% three weeks ago. So we are in the Rieder camp.
Earlier on Tuesday morning, Max Kettner of HSBC was the guest & chief articulator of the market’s signals on Bloomberg Surveillance. If you thought Amanda Lyman (above) was bullish & relatively unconcerned about the broader economy, read what Max Kettner said about the relevance of the broader economy to his views:
- “there might be a disconnect in the weakest part of the economy; that’s not representing the S&P of course, particularly not the mega caps; the weaker $-effects, they really, really do help particularly the largest companies within the S&P“
In other words, the only relevant aspect about the weakest sections of America is they actually help the largest S&P companies by weakening the Dollar! Kudos to Signor Kettner. He is singularly focused on his job of covering the largest companies. And what are they telling him?
- “we run guidance sentiment indicators where we look at the forward looking sentiments of CEOs & CFOs in earning calls and they are telling us that both in Europe & particularly in the US, things are getting better; really the underlying corporate strength is improving and companies within the S&P that are upgrading the guidance relative to those downgrading the guidance – that is going up as well; so all of that is telling us that underlying corporate fundamentals have in fact improved very much & particularly in the last 2-3 months since liberation day “
Then Signor Kettner really got going:
- “… in the next 6 months, remember we get fiscal stimulus, even got tax rebates, positive wealth-effects, real-estate prices up … then you look at corporate profits, AI tailwind affecting half of S&P plus tailwind from weaker Dollar – all of that is perfect cocktail for higher prices and on top of that you throw in rate cuts that, from a growth perspective we don’t need and certainly from a financial conditions perspective we don’t need… Fed’s weekly activity index is going up for the last 2 months; overall broad activity is healthy; “
We must congratulate Lisa Abramowicz of Bloomberg for interrupting these positively effusive statements & say “a number of people are throwing things at the TV” about his dismissals of job conditions. Kudos to her & her colleague Jonathan Ferro for keeping their heads in the midst of Kettner’s dismissal of jobs & employment which he claimed were mainly due to immigration crackdowns in America.
Allow us to be clear. We are neither blaming nor disparaging Mr, Kettner. He honestly points out, that in his discipline, he mainly focuses on signals coming from the stock market and those signals are very positive. That is what Amanda Lyman also said above about corporate credit but she said much more gently without dismissing weaker sections of America as “irrelevant” and mainly useful for weakening the Dollar.
After Mr. Kettner, came Neal Dutta of Renaissance Macro at minute 30:20. He said
- “Very important for people to NOT rationalize away a slow-down in the Jobs market … Yes, we are on the precipice of recession; the markets are underpriced for the prospects of one… this year I think they should do a little bit more up front but I don’t think they will ; to me the risk is the Fed ultimately won’t deliver as much as they should & that kinda reinforces the slowing we have already seen “..
Then came Ed Yardeni at minute 52:43 with a view opposite to that of Neal Dutta above:
- “my concern is lowering interest rates will lead to financial instability; solid productivity-led growth in real GDP implies that currently interest rates are just fine where they are; … technology accounts for 50% of capital spending now; that’s only gonna go higher; … economy’s nature has changed significantly; I think the stock market has figured it out & its all good if I am correct about productivity“
At this point, we will take a detour to Jim Paulsen on CNBC. Read how he interprets the Job market & specifically the “productivity” worshipped by the likes of Yardeni:
- “the employment in the information-processing industry has been flat to down for years; … if anything the downside has been accelerating as those companies are growing faster & faster... what’s happening in the tech industry they are almost too productive for their own labor force & that’s bleeding out into other areas … Oracle really thinks its gonna grow that fast next 5 years; to me that exudes disinflationary, deflationary force in the economy overall & again I think that’s a catalyst to focus more on saving the jobs market right here than on inflation when it is already 2.7%”;
Paulsen then ended up mocking Powell’s Fed when he pointed the below:
- “in the 1990s, CPI averaged 2.6% during the decade of the 90s which most people said was Nirvaan; today we have the same inflation for the last couple of years & its a problem for the Federal Reserve! I think they have to move off that pretty soon. “
That brings us to closing note of Tuesday’s Bloomberg Surveillance & a focus on looking at the economy instead of stock market signals. Emily Rolland of John Hancock has been correct a couple of times we heard her on FinTV. She exceeded herself this past Tuesday in our opinion. Her comments begin at minute 1:40:21 of https://www.youtube.com/watch?v=Twe-MR0Ae88 .
- “… markets are acting as if this is goldilocks labor markets data; to us it is NOT; job openings 7.1 mm in July; that’s near the post-COVID low; Challenger layoffs tallying up 40% mnth/mnth & 13% yr/yr; … companies are telling us they have the least amount of hiring plans since 2009; non-farm payrolls are a very weak 22,000/-; healthcare is driving all of that; without the healthcare sector, job-growth would actually be negative; unemployment at 4.3% – that’s a post-COVID high; so we actually think there is actually something more nefarious going on with the labor market; – we should not brush over that; “
Then re housing,
- “we are seeing major shifts in the housing market; now shelter is 35% of CPI; prices are down 4-months in a row; right now there are more sellers than buyers in this market; all these are contributing to slowing of economic growth; the Fed is frankly behind the curve ”
What about signals from the equity markets? Ms. Rolland said:
- “equity markets are in a honeymoon phase; it all comes back to the wealth effect; S&P is up 11% ytd; international stocks don’t even worry whether they have earnings or not; Chinese stocks, the new technical titans of the market with earnings growth of zero%; European financials up 50%; so portfolios are contributing to this sentiment; key again is going to be the labor market; we are seeing consumers pulling back”
So that above is the difference in viewpoints from two different angles – stock & bond markets vs. broad economy & jobs market. Does the FOMC even have a clue? Honestly, we doubt it. If they had, they would have fixed the jobs data to reflect conditions in the 12 million companies in America & not only on 360,000 of the largest ones.
Send your feedback to editor.macroviewpoints@gmail.com Or @MacroViewpoints on X.
