Morning Macro 24th September
Equities finally fell from all-time highs as the Fed Chair Powell raised concerns about the U.S. employment situation, inflation and equity market levels.
Powell: job creation has dropped very sharply
Powell: tariff increases will likely show up as somewhat higher inflation over several quarters
Powell: recent price increases largely reflect tariffs
Powell says the stock market is “fairly highly valued.”
Developed countries PMIs mostly softened in August consistent with moderate economic growth. Europe was flat but Australia, Japan, the UK and the US all slowed. Input prices rose but output prices fell slightly.
Goldman Sachs and Deutsche Bank add to the growing Nvidia bubble call….
Goldman’s head of Delta One slams Nvidia’s increasingly grotesque vendor financing circle jerk “… definitely not old enough to have been around trading during the tech bubble and let’s level set, multiples are now where near that point in time. That said, vendor financing was a feature of that era and when the telecom equipment makers (Cisco, Lucent, Nortel, etc.) extended loans, equity investments, or credit guarantees to their customers who then used the cash/credit to buy back the equipment…well suffice it to say, it did not end well for anyone.” – Rich Privorotsky “It may not be an exaggeration to write that NVIDIA – the key supplier of capital goods for the AI investment cycle – is currently carrying the weight of US economic growth.” -DB’s George Saravelos
Boiling frog syndrome, EURUSD mind the gap! (Chart 1, @PPGMacro)
Lithium Americas stock, surges +90% on reports that the U.S. government is seeking to buy up to a 10% equity stake in the company. I wonder who got to front run that trade!
Platinum also jumped 5.7% overnight
With Argentinian Peso -20% in three months US Treasury Secretary Scott Bessent’s pledged on Monday to provide ‘all options for stabilisation’ to Argentina is such a significant move to bring the crisis-prone economy back from a dangerous volatility spiral.
Data today – US new home sales, German IFO
