James Brodie
Head of Learning & Development, Flux
Got Gold? Macro Cracks Under the Weight
US yields rise despite buybacks, Trump floats $5k payments, UK yields jump, while tech margins soar and markets eye ke
After Bessent said “I am the house”, yesterday US Treasury just announced it is tripling long-term buybacks to $6 billion and yields STILL rallied on the news, 30-year up 4.5bp….. THEN Trump announces overnight, if the GOP wins both the House & Senate the mid-terms he will give every American $5000. Just another $1.3 trillion add to the $40 trillion deficit….. Got gold? Buy hard assets.
Then in the UK. Burnham said social security is more important than , UK 30-year rallied 7bp.
US Technology, Media and Telecom profit margins have hit a record 24% - double their 2022 lows, nearly 10 percentage points above their historic trend, and 2.7x higher than the rest of the market - with the AI revolution the primary driver of a profitability transformation that has no real historical precedent. The critical question is whether these margins are structurally permanent or whether competition, regulation, and the weight of capital chasing the same opportunity will eventually compress them - as they have in every prior cycle. (Topdown Charts, LSEG)
US diesel now fetching more than $200 per barrel. Highest print of the Hormuz crisis thus far, only two days closed at the height of the April 2022 crisis closed higher.
For the technical analysts, commodity prices vs the S&P.(@jackprandelli)
Schwab retail activity in August shows investors selling the software rip and buying the semiconductor dip.
The S&P back at key support (Bloomberg)
While USDJPY sits on long term support, bracing for a break of the carry trade (Yen funding asset purchases) (Bloomberg)
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