Macro Regime Tracker: Is the labor market at risk?
Macro regime and risk assets qualified clear
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My view is that we continue to rally in equity indices and that the seasonality narratives floating around should be faded. I laid out the logic for this in the video today:
I want to cover several additional points.
First, the labor market prints for JOLTS, ADP, and NFP are all this week. My view is people are going to realize the labor market is completely fine and we are NOT at risk of an imminet recession. The UB contract trading BELOW the last NFP level is a critical signal in this:
A lot of people have been asking me about my Bitcoin view and nothing dramatic has changed. Bitcoin remain skewed to the upside on a cyclical basis BUT it is underperforming ES significantly on a volatility adjusted basis. I don’t think there is cause for concern for the larger trend to break down but I always weigh being leverage long Bitcoin against being leverage long ES.
I expect the Nikkei to rally, but we have been consolidating in a range over the last two trading days:
I am in the process of writing a macro report for paid subscribers to cover all of this further, so more on this then.
As always, all the systematic models and strategies are updated below. Thanks
Main Developments In Macro
US Macro & Policy
BESSENT TO START FED CHAIR INTERVIEWS ON FRIDAY: WSJ
US INDEX FUTURES RISE; NASDAQ 100 CONTRACTS GAIN 0.4%
US AUG. ISM MANUFACTURING INDEX RISES TO 48.7; EST. 49
US S&P GLOBAL AUG. MANUFACTURING PMI AT 53 VS 49.8 PRIOR
US REGULATORS POSTPONE, SCALE BACK OR CANCEL BANK EXAMS: RTRS
Trump / Trade / Tariffs
TRUMP ENDS REMARKS IN OVAL OFFICE
TRUMP ON PUTIN: MAY TAKE DIFFERENT STANCE IF NOTHING COMES
TRUMP: WILL SEE IF ANYTHING COMES OUT OF ALASKA PUTIN SUMMIT
TRUMP: WOULD HAVE TO GIVE BACK TARIFFS IF APPEAL DENIED
TRUMP: US IS IN 'SERIOUS TROUBLE' WITHOUT TARIFFS
TRUMP SAYS LOSING APPEAL ON TARIFFS WOULD BE ECONOMIC DISASTER
TRUMP: WE'LL SEE A `REVERBERATION' IF WE DON'T WIN ON TARIFFS
TRUMP REPEATS GLOBAL TARIFF IS AN ECONOMIC EMERGENCY
TRUMP SAYS HE WILL APPEAL TARIFF RULING
TRUMP ANNOUNCEMENT TODAY RELATED TO DEFENSE DEPT: FOX
TRUMP ADMIN PLANS TO MOVE SPACE COMMAND HQ TO ALABAMA: REUTERS
TRUMP TO ANNOUNCE SPACE COMMAND HEADQUARTERS AT 2 PM EASTERN
TRUMP SAYS US SPACE COMMAND WILL MOVE TO ALABAMA FROM COLORADO
Fed / Housing Commentary
PULTE: POWELL NOT HOLDING LISA COOK ACCOUNTABLE
PULTE: TRUMP FOCUSED ON GETTING HOUSING MARKET BOOMING
PULTE ON FED'S LISA COOK: DOCUMENTS ARE AUTHENTIC
Global Macro – Europe
ECB’S MULLER SAYS IT MAKES SENSE TO HOLD RATES, WATCH ECONOMY
ECB GOVERNING COUNCIL MEMBER MULLER SPEAKS TO BLOOMBERG ADRIA
ECB'S VILLEROY: INFLATION ALLOWS FOR FAVORABLE INTEREST RATES
ECB'S VILLEROY: URGENT TO TACKLE FRENCH DEFICIT, DEBT CHALLENGE
ECB'S VILLEROY: INFLATION IS WELL UNDER CONTROL
ECB'S SIMKUS HINTS AT DECEMBER RATE CUT, ECONOSTREAM SAYS
SIMKUS: RISKS TO INFLATION, GROWTH TO DOWNSIDE: ECONOSTREAM
SIMKUS: MORE TRUE THAN NOT THAT ANOTHER CUT COMING: ECONOSTREAM
ECB'S SIMKUS: CUT COULD BE DISCUSSED IN OCTOBER: ECONOSTREAM
ECB'S SIMKUS: SOME RISKS TO ECONOMY MATERIALIZING: ECONOSTREAM
ECB'S SIMKUS SEES NO REASON TO ADJUST RATES NOW: ECONOSTREAM
ECB'S KOCHER ADVOCATES CAUTION AHEAD OF NEXT ECB RATE DECISION
FRENCH 30-YEAR YIELD RISES ABOVE 4.5% FOR FIRST TIME SINCE 2011
EUROPE BOND SALES TOP €49.6 BILLION IN RECORD-BREAKING DAY
VILLEROY REAFFIRMS FRANCE'S NEED TO TARGET 3% DEFICIT IN 2029
Global Macro – Other
BRAZIL 2Q GDP RISES 0.4% Q/Q; EST. +0.3%
ARGENTINA SAYS IMF OK WITH FX INTERVENTION: CLARIN
ARGENTINA'S TREASURY TO INTERVENE IN OFFICIAL FX MARKET: QUIRNO
KREMLIN: RUSSIA, US DIALOG FOCUSES ON UKRAINE NOW: TASS
RUSSIA, US FOREIGN MINISTRIES TO HOLD CONSULTATIONS: IFX
PUTIN: UNACCEPTABLE FOR RUSSIA TO HAVE UKRAINE JOIN NATO
PUTIN: RUSSIA IS NOT AGAINST UKRAINE IN EU
PUTIN: NEW US ADMINISTRATION HEARS OUR POINT OF VIEW
PUTIN SEES WAYS FOR CONSENSUS ON UKRAINE'S SECURITY GUARANTEES
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