US stocks rebounded, alarming Wall Street. This week's focus will turn to the first debate between Hart and CPI data.
①After last week's sharp drop in US stocks triggered by economic concerns, a new wave of bottom-buying stimulated a rebound in the stock market on Monday; ②Looking ahead to this week, traders are closely watching the US inflation data scheduled for release on Wednesday, in search of clues on the scale of the Fed's interest rate cuts; ③In addition, the first presidential debate between Harris and Trump on Tuesday night also attracted the attention of many industry insiders.
The rate cut came too late! Bond traders believe that the Federal Reserve is severely lagging behind.
Last Friday, the bond market sent out several warning signals of potential economic recession, one of which was the changing relationship between the 2-year and 10-year US Treasury bond yields.
US Yield Curve No Longer Inverted: Why This Time The Recession Scenario Might Be Different For Investors
The Bond Market Just Flashed a Reliable Recession Signal. Don't Panic.
Janet Yellen Says Recent Data Points to Soft Landing for U.S. Economy
Are U.S. Treasury bonds outpacing? The speed of the Fed's interest rate cut may determine the life and death of U.S. Treasuries going forward.
For traders, the sharp increase in US Treasury bond yields is a headache. Some believe that the rapid rise in US Treasury yields has already priced in rate cuts, posing a short-term downside risk. There are also analysts who believe that the Federal Reserve may 'think outside the box', with market expectations not fully priced in, leaving room for further increase in US Treasury bonds.
When the long positions of US stocks start to 'surrender': Is Wall Street really scared this time?
①The worrisome data that the bond and csi commodity equity index markets had long ago 'predicted' finally awakened risk asset traders from their 'dream' last week, with US stocks posting their worst performance since the 2023 regional banks crisis; ②The well-known financial blog website Zerohedge indicated that the stock market's recent plunge may be even worse than the Black Monday of August.
The theory of "bad news = good news" is gradually disintegrating, and the US stock market is returning to a classic framework: driven by performance and the economy.
Wall Street traders suddenly focus on future economic risks; stocks resume selling off after decoupling from bonds and csi commodity equity index, jpmorgan's model shows different economic recession probabilities across different assets.
Goldman Sees Fed Base Case for 25bp Rate Cut in Speeches by Bank Leaders Waller, Williams
Record volume! The heavyweight employment report and the high-ranking officials of the Fed "ignite the wind," betting on a surge in futures trading.
In August, the United States added fewer non-farm jobs than expected. Federal Reserve official Bullard, one of the most influential officials, said that it is crucial to start cutting interest rates in September and has an open attitude towards the magnitude and speed of the rate cut. "New Federal Reserve News Agency" interpreted Bullard's speech as indicating his inclination to support an initial 25 basis point rate cut.
The Fed Needs to Cut More Than Once for Stocks to Be Attractive Vs. Bonds – Analyst
Treasury Yields Fall After August Jobs Report, US10Y Hits Lowest Level Since June 2023
Say Goodbye to the Inverted Yield Curve? -- WSJ
U.S. Treasury Yields Could Extend Fall If Fed Rate Cut Expectations Rise -- Market Talk
Is the US job market weak? Some traders are betting that the non-farm payroll data tomorrow night will be strong, and the 10-year US Treasury bond yield may rise above 4%.
The US Department of Labor will take action. Analysis suggests that in order to create a 'strong economy' political demand, the United States may adjust the data to make the job market appear stronger. On Wednesday, demand for put options on 10-year US Treasury bonds increased significantly, with traders investing millions of dollars to bet on a surge in bond yields in the next 48 hours.
U.S. Two-10-Year Treasury Yield Curve Steepening Set to Continue -- Market Talk
For the second time in two years, the US bond yield curve briefly ended its inversion, but could this signal a recession?
Weak labor data contributes to the speculation of a rate cut by the Federal Reserve, briefly ending the inverted yield curve, the last time this happened was on August 5th when the European and American stock markets plummeted due to poor non-farm data. However, historically, when the yield curve ends its inversion, it indicates the beginning of economic problems, which may be a negative signal for the stock market.
BofA Says These Indicators Support Buying Seasonal Weakness Before a Post-election Rally
Yield Curve Between US10Y and US2Y Briefly Normalizes After Latest JOLTS Data
Safe Haven Demand Expected to Support U.S. Treasurys -- Market Talk