Ain’t That a Kick in the Head

VIPs 10-Year Treasury yields slipped to an intraday low of 1.15% yesterday, 20 bps south of the lowest Q3 yield forecast by Bloomberg; even smaller was the 2s/10s spread hitting a low of 98 bps before ending the day at 100 bps, pushed down by the delta variant and...

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Old Long Since

VIPs Despite Q2 GDP boasting some of the strongest consumer spending since the 1950s, first half fiscal transfers totaled an annualized $14 trillion, or 62% of U.S. GDP; as of June 2020, real personal income, net of government transfers, is actually down by $50.5...

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The Dean of Hamburger University

  VIPs On July 15, the Treasury Department sent out $15 billion in child tax credit payments, averaging $423 per household; per Bank of America customer data, households that received the injection saw spending spike, whereas households that didn’t continued to...

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The Remarkable Story of Chicken Big

VIPs At $178 billion in Q1, S&P 500 buybacks are off their COVID low of $89 billion, but still down from Q1 2020’s $199 billion; meanwhile, operating earnings less buybacks and dividends hit a record $99 billion in Q1, just above the old record of $97 billion in...

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The Rising

VIPs The Labor Curve, the spread between Jobs Hard to Get and Fewer Jobs from Conference Board’s consumer survey, is inverted and flashing a late-cycle signal; past inversions beyond -3 were all followed by a recession, making July’s -6.3 reading all the more...

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Wax on, Wax Off

VIPs Yields on 10-year TIPS fell to a record low of -1.11% yesterday, with the difference between real and nominal yields hitting 2.4%, the highest since June 4; the fresh move lower in real yields is likely due to private investors, as the three largest TIPS ETFs all...

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Bucking the Moon

VIPs Friday’s IHS Markit manufacturing headline moved up one point to 63.1, but Input Prices continue to rise to ever record highs; higher input costs have begun to wear on executive outlooks, as Future Output and New Orders both appear to be coming off recent highs...

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Keith Goldberg Asks, “What’s in Your Wallet?”

VIPs The week ended July 17 saw a third straight jump in not seasonally adjusted initial claims, returning above 400,000 for the first time since June 5; despite falling off of pandemic highs, US claims are still 87.5% above the pre-pandemic levels from the week of...

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In QE We Trust

VIPs Since July 2008, the Fed has grown its holdings of Treasuries and MBS from $479 billion to $5.223 trillion; meanwhile, market instability fomented, with 2017 seeing 52 days where the VIX closed below 10 vs. just 9 days total prior to then, across 1993-1994 and...

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Giant Sucking Sound

VIPs The U.S. trade deficit has grown nearly 50-fold to $1.1 trillion from $23 billion in Q1 1981; America’s busiest port by tonnage, Houston, saw traffic rise 66% YoY in May, and if the import surge persists into 2022, GDP math indicates it will temper top-line...

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