* Futures estimate of first rate cut on Sep. 18 rises to 90%-plus probability
* Rate cuts may be appropriate, says San Francisco Fed president Mary Daly
* Jobless claims in US fell to a 6-week low last week
* US consumer inflation’ 1-year trend falls to 3.0% in June–lowest in over 3 years
* US 10yr Treasury yield drops to 4.22%, lowest close since March:
The S&P 500 Index closed sharply higher on Wednesday (July 10), rising to yet another record high. Beta risk, in other words, is making more investors look like geniuses this year. The question is whether the increasingly strong ex post returns are borrowing from the ex ante data?
* Near-zero rates era is “probably over,” says Fed Chairman Powell
* Federal Trade Commission set to sue big pharma over high drug costs
* Gen X retirement crisis looms, new survey suggests
* CFTC chairman reiterates that Bitcoin and Ether are commodities
* Asia stock surge, led by tech stocks rallied including chipmaking giant TSMC
* US stock market (S&P 500) rises sharply, setting yet another record high:
A month ago it was reasonable to wonder if the worst was over for fixed income securities writ large. Four weeks later, Treasury prices are slightly higher, but the debate continues as investors consider how the Federal Reserve will adjust monetary policy, or not, in the weeks and months ahead.
* Fed Chair Powell says keeping rates too high for too long threatens growth
* Financial stocks lead S&P 500 to new record high
* There’s a case for international investing for long-term investors
* China inflation remains soft in June, reflecting weak consumer demand
* China auto exports surge, helping offset sales slump at home
* Workers to strike indefinitely at South Korea tech giant Samsung
* US corporate bankruptcy filings in June rise above previous peak in 2020:
Judging by the analysis in some circles, a recession is a forgone conclusion. More cautious types argue that the expansion continues, but just barely, and that a formal recession will likely start at some point in the next several months. As usual, it’s impossible to fully discount any given forecast. But a review of a broad range of economic and financial data still leaves room for debate. Yes, macro risk is rising for the US, but the economy has not yet reached the tipping point.
* US consumers’ near-term inflation expectations fell again in June: NY Fed survey
* Slump in US housing market sales continues into a third year
* Air travel demand is surging but airline profits are not
* China electric vehicle giant BYD plans to build $1 billion plant in Turkey
* US small business sentiment ticks up in June but remains near multi-year low:
More investors are asking the question lately, in part because markets are seemingly defying gravity and ignoring various macro and geopolitical risks. Yet a broad reading on market trends has yet to signal trouble ahead, based on a review of ETF pairs. That doesn’t ensure the bull run will continue, but at this point the idea of calling a top and going defensive is based primarily on contrarian-based forecasting. Trend analysis, by comparison, still reflects optimism, rational or otherwise. Pick your poison.
* Hurricane Beryl strengthens, makes landfall along Texas coast
* Hefty debts, and hard chocies, await new leaders in Europe
* Big banks taking hits from falling commercial property prices
* US payrolls beat expectations for June, but revisions reflect slower growth
* Consumer demand is weakening, based on ISM survey data for June:
The Capital Spectator will be off the grid for the next several days, celebrating the July 4th holiday with an extended weekend at several undisclosed locations. The usual routine resumes on Monday, July 8. Happy Independence Day!