Exciting Times, But Don't Get Too Excited
Exciting Times, But Don't Get Too Excited
There's no question that the past 5 days have been the best 5 days that we've seen in a long time in terms of direction movement in rates. They're made all the more miraculous because the past 2 days included much higher inflation readings. In a vacuum, inflation data was bad for rates. But the opposing forces are/were stronger in this case. There are two to consider: AI/tech correction and bond seller exhaustion. We've said for a while that yields would eventually be high enough to prompt some value buying and that 5.34-5.35% may be 2026's version of 2023's 5.00%. As luck would have it, that factor coincided with a rapid increase in the tech sector, primarily driven by Coreweave, but with the word "contagion" also being thrown around. Here's why you should temper excitement: to whatever extent "contagion" doesn't materialize, bonds will lose a good amount of the support they've recently enjoyed. What we've seen so far could be considered "act 1" of a very enjoyable show, but it could also be a short story that ends here. The only surefire justification for a bigger rally is a sustained economic slowdown, preferable coinciding with the war ending and oil falling.
Exciting Times. Don't Get Too Excited
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Thursday, Oct 15 | |||||
| 8:30AM | Oct Philly Fed Prices Paid | Oct | 43.20 | 48.60 | |
| 8:30AM | Sep Core PPI m/m (%) | Sep | 0.7% | 0.3% | 0.2% |
| 8:30AM | Sep Core PPI y/y (%) | Sep | 5% | 4.4% | 4.6% |
| 8:30AM | Oct/03 Continued Claims (k) | Oct/03 | 1710K | 1710K | 1716K |
| 8:30AM | Oct/10 Jobless Claims (k) | Oct/10 | 199K | 200K | 197K |
| 8:30AM | Oct NY Fed Manufacturing | Oct | 25.50 | 10.3 | 7.60 |
| 8:30AM | Oct Philly Fed Business Index | Oct | 20.9 | 28.4 | 37.8 |
| 8:30AM | Sep PPI m/m (%) | Sep | 1.3% | 0.5% | 0.4% |
| 8:30AM | Sep PPI y/y | Sep | 6.3% | 5.3% | 5.4% |
| 8:30AM | Sep Retail Sales Control Group MoM | Sep | 0.1% | 0.3% | 1.4% |
| 8:30AM | Sep Retail Sales (%) | Sep | 0.8% | 0.3% | 1.2% |
| 10:00AM | Aug Business Inventories (% ) | Aug | 0.4% | 0.4% | 0.8% |
| 12:00PM | NOPA Crush Report (%) | ||||
| 12:00PM | Oct/09 Crude Oil Inventory (ml) | Oct/09 | -8.557M | -0.3M | -3.186M |
| Friday, Oct 16 | |||||
| 8:30AM | Sep Import prices mm (%) | Sep | 0.8% | 0.7% | |
| 9:15AM | Sep Industrial Production (%) | Sep | 0.4% | 0% | |
| 2:00PM | Sep Federal budget (bl) | Sep | $-29B | $-167B | |