Eurodollar University

The most significant macro data from the past week certainly wasn't GDP (it wasn't even the most important datapoint within its own series), instead it was personal savings. It is yet another confirmation of what we've been hearing from across the economy and markets. Consumers are tapped out, and they're out of money because of jobs and incomes.Eurodollar University's conversation w/Steve Van MetreBLS Metropolitan Area Employment and Unemployment (Monthly)https://www.bls.gov/web/metro.supp.toc.htmBLS Over-the-year percent change in total private average weekly earnings for metropolitan areas, not seasonally adjustedhttps://www.bls.gov/charts/metro-area-employment-and-unemployment/metro-area-oty-percent-change-in-average-weekly-earnings.htmChallenger, Gray, & Christmas Challenger Report: Job Cuts Remain Low While Hiring Falls to Lowest YTD Since 2012https://www.challengergray.com/blog/challenger-report-job-cuts-remain-low-while-hiring-falls-to-lowest-ytd-since-2012/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

People keep saying the economy is in the toilet and the US government keeps raising its estimate for GDP. The general public isn't wrong, GDP is. How do we know? Because that's what GDP says - its other side. Not as well known, it should be because this is the one which is far more accurate during cyclical downturns. History, academic studies, consistency with other signals, not to mention how much it backs up popular perception. Everything including the better side of GDP is lined up against GDP. Eurodollar University's Money & Macro AnalysisJeremy Nalewaik Board of Governors of the Federal Reserve SystemThe Income- and Expenditure-Side Estimates of U.S. Output Growth https://www.brookings.edu/wp-content/uploads/2010/03/2010a_bpea_nalewaik.pdfCNBC Dollar General shares crater 25% as retailer cuts outlook, blaming ‘financially constrained’ customershttps://www.cnbc.com/2024/08/29/dollar-general-shares-crater-20percent-as-retailer-cuts-outlook-blaming-financially-constrained-customers.htmlCNBC Lululemon cuts guidance, misses sales estimates after botched product launchhttps://www.cnbc.com/2024/08/29/lululemon-lulu-earnings-q2-2024.htmlMorningstar Lululemon Earnings: Near-Term Outlook Dims, but Profitability and Underlying Brand Strength Holdhttps://www.morningstar.com/stocks/lululemon-earnings-near-term-outlook-dims-profitability-underlying-brand-strength-holdUBS “Vibecession”? - The paradox between hard data and sentimenthttps://www.ubs.com/us/en/wealth-management/insights/market-news/article.1608955.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

New information from various sources all around the US service sector shows a downturn taking hold in that segment with employment signals turning more and more negative. It confirms the ongoing and more decisive bull steepening continuing to take shape in the Treasury market. Even mainstream sources are having to cover the fact there is something big happening when you can see it in services.Eurodollar University's Money & Macro AnalysisCNN A key part of America’s economy has shifted into reversehttps://www.cnn.com/2024/07/07/economy/stocks-week-ahead-services-sector-slow-restaurants-stores/index.htmlFRB Philadelphia August 2024 Nonmanufacturing Business Outlook Surveyhttps://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/nbos-2024-08Fifth District Survey of Service Sector Activityhttps://www.richmondfed.org/region_communities/regional_data_analysis/surveys/service_sectorTexas Service Sector Outlook Surveyhttps://www.dallasfed.org/research/surveys/tssos/2024/2408https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

German observers are saying the economy has reached crisis proportions and the reason is what the US economy's weakness is doing to the rest of the world. Rather than recover as many in Europe had hoped, the situation has turned grim due to America's growing negatives. As one result, bulls are firmly in charge of all the curves.Eurodollar University's Money & Macro AnalysisIFO Business Climate Index deteriorates (August 2024)https://www.ifo.de/en/facts/2024-08-26/ifo-business-climate-index-deteriorates-august-2024Dow Jones German business increasingly in trouble, Ifo survey findshttps://www.morningstar.com/news/marketwatch/2024082620/german-business-increasingly-in-trouble-ifo-survey-findsWSJ German Economic Expectations Nosedive as Global Slowdown Fears Bitehttps://www.wsj.com/economy/central-banking/german-economic-expectations-nosedive-as-global-slowdown-fears-bite-944996b5S&P Global/HCOB Germany PMIs August 2024https://www.pmi.spglobal.com/Public/Home/PressRelease/3c59ed1870c24259ac3e62cfb7792724deStatis Germany June Tradehttps://www.destatis.de/EN/Press/2024/08/PE24_300_51.htmlBundesbank Forecast for Germany: German economy slowly regaining its footinghttps://www.bundesbank.de/en/press/press-releases/bundesbank-forecast-for-germany-german-economy-slowly-regaining-its-footing-933658https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Chinese e-commerce retailer Temu becomes the latest global consumer business to warn about the economy - exactly what bonds have been doing all year much to the growing frustration of authorities. They'd rather derail lower market rates at the same time as cutting their own? It actually does make a lot of sense as all these things are related.Eurodollar University's Money & Macro AnalysisBloomberg PDD’s Warning Highlights Growing Strain on China Consumer Firmshttps://www.bloomberg.com/news/articles/2024-08-27/pdd-s-warning-highlights-growing-strain-on-china-consumer-firmsCNBC Shares of Temu parent company PDD plunge almost 29%https://www.cnbc.com/2024/08/27/shares-of-temu-parent-company-pdd-plunges-29percent-largest-one-day-loss.htmlBloomberg China Economists See Weak Demand Despite Expected Rate Cutshttps://www.bloomberg.com/news/articles/2024-08-26/china-seen-mired-in-weakening-demand-despite-expected-rate-cuts?srnd=phx-economics-v2Bloomberg PBOC Holds Policy Rate Steady After Warning on Bond Rallyhttps://www.bloomberg.com/news/articles/2024-08-26/pboc-holds-policy-loan-rate-steady-after-warning-on-bond-rally?srnd=phx-economics-v2Bloomberg China Won’t Ban Bond Trading But Sees Risk in Buying Frenzyhttps://www.bloomberg.com/news/articles/2024-08-24/china-won-t-ban-bond-trading-but-sees-risk-in-buying-frenzyhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Just as low interest rates are being validated in every way, some Economists like Nouriel Roubini are alleging that yields are instead being held down by noted monetary genius Janet Yellen who has the Treasury Department engaged in a form of stealth QE. The problem is actually Economists who think interest rates are nothing more than tools to be manipulated by all-powerful govts when in reality they are more accurate though not perfect reflections of how govts fail.Eurodollar University's Money & Macro AnalysisRoubini/Miran Hudson Bay Capital ATI: Activist Treasury Issuance and theTug-of-War Over Monetary Policyhttps://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/635102_Activist_Treasury_Issuance_-_Hudson_Bay_Capital_Research.pdfFT People are flipping out about T-bill issuancehttps://www.ft.com/content/f0f62f0b-fee2-463a-a075-3b8dab333f40TBAC Fiscal Year 2023 Q3 Reporthttps://home.treasury.gov/system/files/221/TreasuryPresentationToTBACQ32023.pdfTBAC April 30, 2024https://home.treasury.gov/system/files/221/TBACCharge1Q22024.pdfCNN 'Dr. Doom' explains why the Fed will lose its inflation battlehttps://www.cnn.com/videos/business/2022/10/19/nouriel-roubini-markets-now.cnn-businessBloomberg Roubini Sees Significant Chance of ‘No Landing’ for US Economyhttps://www.bloomberg.com/news/articles/2024-03-04/roubini-sees-significant-chance-of-no-landing-for-us-economyhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Jay Powell's Jackson Hole appearance and speech wasn't really about rate cuts. It was a sales job trying to sell you and as much of the world as possible on the Fed itself. Just making the pitch, however, means implicitly admitting the US economy just leapt out of the frying pan and into the fire. Powell says it's OK because he knows how to turn the heat down when there is zero reason to believe anyone at the FOMC knows where it is us or what the temperature is going to be. Eurodollar University's conversation w/Steve Van MetreJay Powell Jackson Holehttps://www.federalreserve.gov/newsevents/speech/files/powell20240823a.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

It wasn't just a pivot, Powell admits the US economy is in trouble as unemployment has already started rising. While that's it's own can of worms, there are also more monetary and financial considerations related to what happened early in August. CLOs, collateral, stock market liquidations, all tied to what the Fed just agreed to. Eurodollar University's Money & Macro AnalysisEDU YT Japan is buying MASSIVE Amounts of Junk Credithttps://www.youtube.com/watch?v=_a_2J6mU48oCNBC Jay Powell Jackson Holehttps://www.youtube.com/watch?v=zpiMF6bZ0sgText of Powell Speechhttps://www.federalreserve.gov/newsevents/speech/powell20240823a.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The economy really has deteriorated quickly, enough that what seemed highly unlikely if not impossible early in July was very near to happened at the end of the month. I said a July Fed rate cut was in play on the 3rd and now according to the FOMC's minutes...it was. That, along with panicky central bankers seeking to quicken the pace of cutting, is definitely not a good sign. Eurodollar University's Money & Macro AnalysisEDU YT This Could Force the Fed to Cut Rates in Julyhttps://www.youtube.com/watch?v=B03jMrfetks Pascal Michaillat, Emmanuel Saez Has the Recession Started? August 2024https://pascalmichaillat.org/16.pdfFOMC July 2024 minuteshttps://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240731.pdfPolitico Sharp slowdown in wage growth boosts ECB rate cut hopeshttps://www.politico.eu/article/big-slowdown-in-wages-boosts-ecb-rate-cut-hopes/Bloomberg ECB’s Rehn Says Growth Risks Bolster Case for September Cuthttps://www.bloomberg.com/news/articles/2024-08-19/ecb-s-rehn-says-growth-risks-bolster-case-for-september-cuthttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Was Macy's the latest victim of the strong labor market? That doesn't make sense, of course, and now the government data has been revised massively lower to better align what really happened last year with where we are this year. The new figures show not just one-third fewer jobs gained, more importantly what that does the rate of change in the rate of change (2nd derivative). It ends up in Macy's sales forecast.Eurodollar University's Money & Macro AnalysisCNBC Macy’s cuts sales forecast as department stores struggle to draw shoppershttps://www.cnbc.com/2024/08/21/macys-m-q2-2024-earnings.htmlMacy's Quarterly Resultshttps://www.macysinc.com/newsroom/news/news-details/2024/Macys-Inc.-Reports-Second-Quarter-2024-Results/default.aspxBLS QCEW Homehttps://www.bls.gov/cew/BLS QCEW CES Preliminary Benchmark Announcementhttps://www.bls.gov/web/empsit/cesprelbmk.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Gold jumped to another record high at the same time stocks are back closing in on theirs. Only two weeks after global financial chaos that has everyone wondering where things are heading, the implications of each could not be more different. So, where does everything else stack up? Is it just gold vs equities?Eurodollar University's Money & Macro AnalysisReuters Gold extends record rally on dollar weakness, rate-cut betshttps://www.reuters.com/markets/commodities/gold-steady-near-record-high-investors-seek-more-fed-cues-2024-08-20/Bloomberg S&P 500’s Furious ‘Momentum Rally’ Takes a Break: Markets Wraphttps://www.bloomberg.com/news/articles/2024-08-19/stock-market-today-dow-s-p-live-updatesCNBC U.S. crude oil falls nearly 3% as U.S. pushes for Gaza cease-fire, China demand weighs on markethttps://www.cnbc.com/2024/08/19/crude-oil-prices-today.htmlBloomberg Diesel Demand Hits 26-Year Seasonal Low in US on Slowing Economyhttps://www.bloomberg.com/news/articles/2024-05-31/diesel-demand-hits-26-year-seasonal-low-in-us-on-slowing-economyhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Economists and officials therefore the financial media continue to downplay the plunge in US consumer confidence, repeatedly referring to it as a "vibe-cession" that doesn't fit with the current data or modeled forecasts. History, common sense, and even econometric math isn't on their, or the data's, side. All of those say unemployment is about to surge.Eurodollar University's Money & Macro AnalysisWashington Post Why We're Gloomier Than The Economyhttps://www.washingtonpost.com/wp-dyn/content/article/2008/06/17/AR2008061702463_pf.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Revisions are a normal part of high frequency data. Constant, near-exclusive downward revisions are not. Rewrites should be more evenly distributed which means these stats are overstating the economy. Plus, the problem is spreading hitting retail sales and IP as well as payrolls. While everyone went nuts over retail sales, the problem with July's number isn't just the likely downward revision.Eurodollar University's conversation w/Steve Van MetreBloomberg Fed’s Goolsbee Says He’s Growing More Concerned About Employmenthttps://www.bloomberg.com/news/articles/2024-08-14/fed-s-goolsbee-says-he-s-growing-more-concerned-about-employmentBloomberg Manufacturers Axe Products as a Factory Slowdown Lingershttps://www.bloomberg.com/news/newsletters/2024-08-16/rockwell-rok-xylem-xyl-axe-products-as-factory-slowdown-deepenshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Financial volatility. Recession conditions. Lower growth and inflation. The rate cuts are still coming. So, that means interest rates around the world are about to go...UP? The fundamentals haven't changed - the calendar has. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Steel prices are plunging, down a quarter since May at lows not seen since 2016. The chairman of the world's largest producer just said he expects it to get much worse in terms of prices and for industry. The implications are far broader than steel or China. Eurodollar University's Money & Macro AnalysisBloomberg World’s Biggest Steel Producer Warns of ‘Severe’ Industry Crisishttps://www.bloomberg.com/news/articles/2024-08-14/china-steel-industry-in-crisis-as-baowu-warns-of-severe-winterBloomberg ArcelorMittal Cries Foul on Steel Exports From Chinahttps://www.bloomberg.com/news/articles/2024-08-01/arcelormittal-cries-foul-on-china-steel-exports-as-profit-fallsBloomberg Iron Ore Takes Fresh Hit as Concerns Over Global Glut Exact Tollhttps://www.bloomberg.com/news/articles/2024-08-12/iron-ore-in-retreat-as-concerns-over-global-surplus-take-tollS&P Global China's steel output remains strong; downstream outlook still dimhttps://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/071524-chinas-steel-output-remains-strong-downstream-outlook-still-dimhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This was supposed to be all about "inflation" and instead everything is coming up jobs - including the latest CPI report. From Home Depot's most recent admission to now US refiners taking drastic steps to avoid getting caught with an energy glut (yep, that's right), the entire economy flipped from "sticky inflation" to Uh-Oh over employment. Eurodollar University's Money & Macro AnalysisBloomberg It’s Inflation Week in the US. But Everyone’s Talking About Jobshttps://www.bloomberg.com/news/newsletters/2024-08-12/fed-rate-cuts-it-s-us-inflation-week-and-everyone-s-talking-jobsHome Depot https://corporate.homedepot.com/news/earnings/home-depot-announces-second-quarter-2024-earningsCNBC Home Depot expects sales to weaken as consumers grow more cautioushttps://www.cnbc.com/2024/08/13/home-depot-hd-q2-2024-earnings.htmlBloomberg Oil Refiners in US Slow Down, Stoking Global Crude Glut Worrieshttps://www.bloomberg.com/news/articles/2024-08-11/oil-refiners-in-us-slow-down-stoking-global-crude-glut-worrieshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

While the world was distracted by US recession provoking a Japanese stock market crash, China was continuing to meltdown. In just the past few days the country reported: a record drop in foreign money fleeing China; the first contraction in bank lending to the real economy in nineteen years; record low market interest rates; and the PBOC going off the rails trying to derail that bond rally. And we thought China was in rough shape...last month. Eurodollar University's Money & Macro AnalysisBloomberg China Goes to New Extreme in Crackdown on Bond-Market Frenzyhttps://www.bloomberg.com/news/articles/2024-08-13/china-goes-to-new-extremes-in-crackdown-on-bond-market-frenzyBloomberg China Regulators Tell Some Rural Banks to Renege on Bond Tradeshttps://www.bloomberg.com/news/articles/2024-08-12/china-regulators-tell-some-rural-banks-to-renege-on-bond-tradesBloomberg China Brokers Curb Bond Trading Amid PBOC Warnings on Rallyhttps://www.bloomberg.com/news/articles/2024-08-12/chinese-brokers-curb-bond-trading-amid-warnings-on-rallyBloomberg China Asked State Banks to Keep Record of Government Bond Buyershttps://www.bloomberg.com/news/articles/2024-08-09/china-s-state-banks-asked-to-record-buyers-of-government-bondshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

How in the world does sudden fear over a US recession lead to a crash in Japanese stocks? Even more important, what might that crash suggest about the US recession? Our world is more interconnected than you've been led to believe. Our entire economic worldview is oriented around national groupings not because that’s the way the world works but because it keeps central bankers in a job. What globally synchronized is telling us now is that job losses are going to painfully rise - ours, not theirs. Eurodollar University's Money & Macro AnalysisBank of Japan New Procedures for Money Market Operations and Monetary Easinghttps://www.boj.or.jp/en/mopo/mpmdeci/mpr_2001/k010319a.htmWorld Bank Research Paper Global Recessionshttps://documents1.worldbank.org/curated/en/185391583249079464/pdf/Global-Recessions.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

After a chaotic, somewhat panicky prior week, the talking points went out with a clear aim to restore calm. That meant downplaying every last concerning development, starting with Jeremy Siegel. Sure enough, he played along and on it went from there. Even Fed officials know what's coming yet they'll keep denying anything's wrong right up until the first emergency meeting rate cut. Eurodollar University's conversation w/Steve Van MetreCNBC Jeremy Siegel backs off on calls for the Fed to do an emergency interest rate cuthttps://www.cnbc.com/2024/08/08/jeremy-siegel-backs-off-on-calls-for-fed-to-do-an-emergency-rate-cut.htmlBloomberg Barkin Says Economy Healthy With Key Questions Around Job Markethttps://www.bloomberg.com/news/articles/2024-08-03/barkin-says-economy-healthy-with-key-questions-around-job-marketBloomberg Layoffs Are a Last Resort Looming for More US Companieshttps://www.bloomberg.com/news/articles/2024-08-08/us-edges-towards-layoffs-as-job-market-cools-fed-rates-pressure-firmsBloomberg Layoffs Are a Last Resort Looming for More US Companieshttps://www.bloomberg.com/news/articles/2024-08-08/us-edges-towards-layoffs-as-job-market-cools-fed-rates-pressure-firmshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Though calm was restored after a wild few days in global financial markets, key market signals remained steadfastly negative. One of the most crucial of those even dropped to a level we've only seen three other times in more than 35 years - all three some of the worst cases. Moreover, that one was corroborated by a record low for swaps also set this week. Eurodollar University's Money & Macro AnalysisCNN Money Fed explains the big rate cuthttps://money.cnn.com/2007/10/09/news/economy/fed_minutes_analysis/index.htm?postversion=2007100914The New York Times Dow Breaks 3,000 but Ends at 2,980.20https://www.nytimes.com/1990/07/14/business/dow-breaks-3000-but-ends-at-2980.20.htmlThe New York Times 10.08 RISE PUTS DOW AT 1,020.35https://www.nytimes.com/1981/04/25/business/10.08-rise-puts-dow-at-1020.35.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Last week, the markets and the media melted down over well-founded recession fear. This week, in the aftermath, everyone will say it was all overblown. That's just normal. Meanwhile, the actual recession continues to progress and the data keeps showing momentum is all on that side. This includes yet another signal strongly correlated with unemployment. If that wasn't enough, yet more warnings from leisure and travel companies. Eurodollar University's Money & Macro AnalysisCNBC Everyone is talking about the Sahm recession indicator.https://www.cnbc.com/2024/08/05/recession-what-is-the-sahm-rule-and-why-is-everyone-talking-about-it.htmlCNBC Airbnb shares drop 14% on earnings miss as company warns of slowing U.S. demandhttps://www.cnbc.com/2024/08/06/airbnb-shares-drop-14percent-on-earnings-miss-as-company-warns-of-slowing-us-demand.htmlCNBC Southwest profit falls 46% as airline takes ‘urgent’ steps to increase revenuehttps://www.cnbc.com/2024/07/25/southwest-airlines-luv-earnings-q2-2024.htmlBloomberg Delta’s Disappointing Outlook Sends Warning on Summer Travelhttps://www.bloomberg.com/news/articles/2024-07-11/delta-s-outlook-misses-estimates-as-carriers-slash-summer-fareshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The date July 11 keeps coming up in a lot of different markets, starting with stocks. The Nikkei's last all-time high was on that day and so was the NASDAQ's. But July also features prominently in commodities and even Treasuries. The reason for it confirms so many suspicions about what just happened this past weekend therefore what it means going forward. Eurodollar University's Money & Macro AnalysisBLS June CPIhttps://www.bls.gov/news.release/pdf/cpi.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

When even big-name mainstream Economists are begging the Fed for emergency rate cuts, you might already have the sense this wasn't just a one-weekend show. US recession scrambles a lot of fundamental perceptions and values, causing a substantial and sizable repricing across asset classes. That repricing just happened to be most obvious and violent in Japan. Eurodollar University's Money & Macro AnalysisPaul Krugman Xhttps://x.com/paulkrugman/status/1820426175031673269CNBC Wharton’s Jeremy Siegel says Fed needs to make an emergency rate cuthttps://www.cnbc.com/2024/08/05/whartons-jeremy-siegel-says-fed-needs-to-make-an-emergency-rate-cut.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Japan was the epicenter for a wave of liquidations in smashing financial markets all over the world. It had all the telltale signs of a collateral and margin call. This wasn't about Japanese banks or even Japan, rather the sudden realization over the US soft landing narrative going up in smoke triggered a monster repricing and revaluation. So, what does all that mean?Eurodollar University's Money & Macro AnalysisCNBC Japan’s Nikkei logs worst day since 1987 Black Monday crashhttps://www.cnbc.com/2024/08/05/asia-markets.htmlThe Economist Why Japanese markets have plummetedhttps://www.economist.com/finance-and-economics/2024/08/05/why-japanese-markets-have-plummetedBloomberg Jolt in Credit Fear Gauges Pushes Company Borrowers to Sidelineshttps://www.bloomberg.com/news/articles/2024-08-05/asia-high-grade-dollar-bond-spreads-widen-the-most-in-22-monthsBloomberg Wall Street Hit by Fears Economy in ‘Danger Zone’: Markets Wraphttps://www.bloomberg.com/news/articles/2024-08-05/japanese-stocks-tumble-leading-equities-selloff-markets-wrap?itm_source=record&itm_campaign=Global_Stocks_Selloff&itm_content=%27Mad_Rush%27_for_Treasuries-3CNBC Dow drops 900 points, Nasdaq craters 3% in global market rout: Live updateshttps://www.cnbc.com/2024/08/04/stock-market-today-live-updates.htmlDeutsche Bank What impact is “higher for longer” having on the CLO market in 2024?https://flow.db.com/trust-and-agency-services/what-impact-is-higher-for-longer-having-on-the-clo-market-in-2024https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The July payroll report confirmed the US economy is heading for trouble. Key parts of it showed recession has likely already begun. As reality dawns across the marketplace, focus turns to what comes next now that the soft landing didn't land. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

With the questions of "what" and "when" now mainly answered, we can finally focus on "how bad." To start putting together some answers, we'll use three different markets and sets of indications each examine a separate aspect of the recession proposition; short run, intermediate, and the long term. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A whole bunch of bad data, much of it focused on deterioration in the US labor market (pre-July payrolls). That unleashed huge swings in rates markets and forward rates. One reason for all this is the historical pattern is perfectly clear. What we're seeing right now happens EVERY TIME. No exceptions. Eurodollar University's Money & Macro AnalysisFOMC Monetary Policy Statementhttps://www.federalreserve.gov/newsevents/pressreleases/monetary20240731a.htmFederal Reserve Chair Powell Press Conference July 31https://www.youtube.com/watch?v=hb1eHcqGpY0https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Central banks don't hike rates during a recession. Or do they? The Bank of Japan just did and for the second time. By doing it, BoJ is laying itself bare; both in terms of transparently acting politically and maybe more important exposing the lie about interest rate policies. Peter Pan is not happy. Eurodollar University's Money & Macro AnalysisBank of Japan Change in the Guideline for Money Market Operations and Decision on the Planfor the Reduction of the Purchase Amount of Japanese Government Bondshttps://www.boj.or.jp/en/mopo/mpmdeci/mpr_2024/k240731a.pdfNikkei Bank of Japan raises interest rate to 0.25%, open to further hike this yearhttps://asia.nikkei.com/Economy/Bank-of-Japan/Bank-of-Japan-raises-interest-rate-to-0.25-open-to-further-hike-this-yearJapan Times Bank of Japan delivers one-two punch few were expectinghttps://www.japantimes.co.jp/business/2024/07/31/economy/boj-rates/Wall Street Journal Bank of Japan Raises Rates, Driving Up Yenhttps://www.wsj.com/economy/central-banking/bank-of-japan-hikes-rates-tapers-bond-buying-in-fresh-step-to-policy-normalization-bc8c33fbBloomberg Japan’s Central Bank Hikes Key Rate Hours Before the Fedhttps://www.bloomberg.com/news/articles/2024-07-31/boj-hikes-interest-rate-unveils-plan-to-cut-back-bond-buyinghttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Hiring in the US absolutely plunged in June, so much you really have to see it to believe it. At the same time, global fast food giant McDonalds reported lower same store sales for the first time since 2020. The reason why people can no longer afford to eat as much under the golden arches isn't necessarily price changes, what's changed recently is the alarming retreat in employment. Eurodollar University's Money & Macro AnalysisBLS JOLTS press release July 30, 2024https://www.bls.gov/news.release/jolts.nr0.htmCNBC McDonald’s earnings, revenue miss estimates as consumer pullback worsenshttps://www.cnbc.com/2024/07/29/mcdonalds-mcd-q2-2024-earnings.htmlCNBC McDonald’s executives admit diners think prices are too high, say they’re working to create valuehttps://www.cnbc.com/2024/07/29/mcdonalds-earnings-executives-say-prices-are-too-high.htmlPhilly Fed Large Bank Credit Card and Mortgage Datahttps://www.philadelphiafed.org/surveys-and-data/large-bank-credit-card-and-mortgage-datahttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A whole lot going on in the eurodollar shadows. Record high repo pool (reverse repo) at the Fed. Bull steepening even more aggressively outside of Treasuries. Primary dealers absolutely hoarding collateral to a degree we haven't seen since March 2020. Banks around the world heavily buying safety and liquidity. The dollar hammering currencies. But why?Eurodollar University's Money & Macro AnalysisReuters Rupee hits record low on month-end dollar demand; RBI helps cap losseshttps://www.reuters.com/markets/currencies/rupee-hits-record-low-month-end-dollar-demand-rbi-helps-cap-losses-2024-07-29/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

According to the latest update, US consumers are out of savings. As nominal incomes have slowed way down, consumers have cut back only somewhat mainly spending on goods - causing the goods recession every big-name company is currently warning over. With unemployment rising and savings gone, there's no margin left even to maintain the current rate of decline. Eurodollar University's conversations w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Companies around the economy are increasingly warning about the negative effects of the goods recession, one after another missing revenue and sales targets/expectations. The latest from several of the largest global businesses point to deepening macroeconomic setbacks. Even the automobile industry is showing signs of serious weakness, starting with pricing. No surprise commodity markets are sharply lower in spite of supply factors as the downturn is set to spread.Eurodollar University's Money & Macro AnalysisBloomberg Markets Tear Up Popular Trades That Reached ‘Stupid Levels’https://www.bloomberg.com/news/articles/2024-07-25/everything-you-thought-you-knew-about-2024-markets-has-changedEuroNews Nestlé downgrades sales outlook and looks to new products for growthhttps://www.euronews.com/business/2024/07/25/nestle-downgrades-sales-outlook-and-looks-to-new-products-for-growthCNBC Unilever pops 6% on margin guidance raise, Ben & Jerry’s spinoff on track to complete by end of 2025https://www.cnbc.com/2024/07/25/unilever-pops-6percent-on-guidance-raise-says-ben-jerrys-spinoff-on-track.htmlSTMicroelectronics Reports 2024 Second Quarter Financial Resultshttps://investors.st.com/static-files/9f07c6a1-5da9-49cf-8a95-4c301436fb0bThe Detroit News Ford CFO says growing dealer inventory 'worries me'https://www.detroitnews.com/story/business/autos/ford/2024/06/11/ford-cfo-john-lawler-growing-dealer-inventory-worry/74056579007/J.D. Power-GlobalData U.S. Automotive Forecast for July 2024https://www.morningstar.com/news/business-wire/20240726147635/jd-power-globaldata-us-automotive-forecast-for-july-2024CNBC U.S. crude oil on pace for third weekly decline as China demand outweighs U.S. growthhttps://www.cnbc.com/2024/07/26/crude-oil-prices-today.htmlCNBC U.S. crude oil falls nearly 2% to lowest levels in six weekshttps://www.cnbc.com/2024/07/23/oil-prices-drop-to-lowest-levels-in-more-than-a-month.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A majority of Americans believe the US is in recession and has been for some time. Second quarter GDP just came out wildly above expectations. So is everyone wrong? Not quite. In fact, the GDP estimates actually explain why people are so mad, what they are already doing about it, and why that spells trouble for the entire economy. Eurodollar University's Money & Macro AnalysisIt doesn’t matter what experts say — 3 in 5 believe America is in a recessionhttps://studyfinds.org/3-in-5-america-in-recession/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The Treasury curve continues to make escalating even decisive bull moves. It's not difficult to see why, as another global consumer company admits its having trouble selling its products and in this case to the more well-to-do segment. In addition, former Fed members are urging immediate rate cuts openly wondering if it might be too late. One neighboring central bank is waiting to find out, unleashing another cut of its own and saying there are surely more coming. Eurodollar University's Money & Macro AnalysisCNBC World’s largest luxury group LVMH slumps 4% after second-quarter revenue misshttps://www.cnbc.com/2024/07/24/worlds-largest-luxury-group-lvmh-slumps-5percent-after-reporting-revenue-miss.htmlBloomberg LVMH Shows the Luxury Sector Is in Painhttps://www.bloomberg.com/opinion/articles/2024-07-24/what-lvmh-tells-us-about-luxury-s-financial-prospectsBloomberg I Changed My Mind. The Fed Needs to Cut Rates Now.https://www.bloomberg.com/opinion/articles/2024-07-24/the-fed-needs-to-cut-interest-rates-nowWSJ Bank of Canada Cuts Policy Rate to 4.5%, Frets Over Downside Riskshttps://www.wsj.com/articles/bank-of-canada-cuts-policy-rate-to-4-5-frets-over-downside-risks-78a7a81bBank of Canada Policy Statementhttps://www.bankofcanada.ca/2024/07/fad-press-release-2024-07-24/Bank of Canada Press Conferencehttps://www.bankofcanada.ca/multimedia/press-conference-monetary-policy-report-july-2024/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Replay of the livestream Member Q&A 100 epic discussion. George. Jim. Steve. Mike. Eric. Brent. Emil and Jeff back together again. Two hours of back and forth. Including why Home Alone lied to you.There was so much all in one place. Spirited back and forth between all the fellas, a real deep dive in true Eurodollar University style. Arguing about the past. Angling toward the future. Even a few questions from EDU members. We just might have to do this again. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

China's dollar woes have jumped in recent months, so much that they've come out of the eurodollar shadows enough to impact the onshore banking system in an unexpected way. Foreign holdings of negotiable bank CDs have exploded. We'll discuss what that means and how it relates to China's dollar shortage and the surprise set of rate cuts announced by the PBOC earlier today.Eurodollar University's Money & Macro AnalysisBloomberg Global Funds Pile Up Nearly a Trillion Yuan of China Bank Bondshttps://www.bloomberg.com/news/articles/2024-07-22/global-funds-pile-up-nearly-a-trillion-yuan-of-china-bank-bondsBloomberg China Surprises With Rate Cut After Xi’s Big Meeting Disappointshttps://www.bloomberg.com/news/articles/2024-07-22/pboc-cuts-seven-day-reverse-repo-rate-to-1-7-to-support-economyhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

To way too many Americans and other workers, this is already a recession of opportunity. Without the major statics yet to show it, mainstream commentary has mocked their plight as a "vibe-cession." Now the data is beginning to more clearly align with the recession "vibe", suddenly even authorities are starting to worry so out comes the rate cuts. As Steve says, that's not what you want. Eurodollar University's conversations w/Steve Van MetreEURODOLLAR UNIVERSITY'S LIVESTREAM NEXT TUESDAY, 7/23 btw 6 - 8 pm ETEURODOLLAR UNIVERSITY'S ANNIVERSARY SALE:https://www.eurodollar.universityBloomberg Goolsbee Says Fed Risks ‘Golden Path’ If It Doesn’t Cut Soonhttps://www.bloomberg.com/news/articles/2024-07-18/goolsbee-says-fed-risks-golden-path-if-it-doesn-t-cut-soonhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

All year all anyone has heard is the Fed and its rate cuts. Soft landings imply a little weakness but no worry, Jay Powell will cut rates once maybe twice and everything will be just fine. The only question is, why on earth does anyone believe this? The evidence and history of interest rate targeting - as you'll see - is indeed 100%, as in total failure. Rate cuts (like hikes) are pure superstition. Eurodollar University's Money & Macro AnalysisEURODOLLAR UNIVERSITY'S LIVESTREAM NEXT TUESDAY, 7/23 btw 6 - 8 pm ETEURODOLLAR UNIVERSITY'S ANNIVERSARY SALE:https://www.eurodollar.universityPBS Is the Fed going to cut interest rates? What was once a question of ‘when’ is now less certainhttps://www.pbs.org/newshour/economy/is-the-fed-going-to-cut-interest-rates-what-was-once-a-question-of-when-is-now-less-certainMorningstar We Expect GDP Growth to Weaken Until Fed Starts Cutting Interest Rateshttps://www.morningstar.com/economy/we-expect-gdp-growth-weaken-until-fed-starts-cutting-interest-ratesFOMC Transcript March 1991https://www.federalreserve.gov/monetarypolicy/files/FOMC19910326meeting.pdfRemarks by Chairman Alan GreenspanRules vs. discretionary monetary policyAt the 15th Anniversary Conference of the Center for Economic Policy Research at Stanford University, Stanford, CaliforniaSeptember 5, 1997https://www.federalreserve.gov/boarddocs/speeches/1997/19970905.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

In the midst of other major warnings, here comes another substantial one. Copper has moved way past its supply squeezed record high from just two months ago and is now crashing. At the same time, gold is reaching new heights. The copper to gold ratio therefore just dropped to its lowest since...November 2020. Taking a deeper look at what all this means. Eurodollar University's Money & Macro AnalysisEURODOLLAR UNIVERSITY'S LIVESTREAM NEXT TUESDAY, 7/23 btw 6 - 8 pm ETEURODOLLAR UNIVERSITY'S ANNIVERSARY SALE:https://www.eurodollar.universityBloomberg China’s Unusually Large Copper Stockpiles Fuel Demand Concernshttps://www.bloomberg.com/news/articles/2024-06-05/china-s-unusually-large-copper-stockpiles-fuel-demand-concernsBloomberg Gold Slips From Record High as Traders Ponder Bet on Fed Pivothttps://www.bloomberg.com/news/articles/2024-07-17/gold-holds-at-record-high-as-rate-cut-bets-fuel-demand-rushhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Swaps are of paramount importance to the financial world, priced by the very monetary system itself. As a consequence, swap market indications are even more critical than the yield curve. But what does it all mean, and how can you decipher what appear its confusing signals? A few minutes on some manageable basics and you're ready to read the market's big move.Eurodollar University's Money & Macro AnalysisEURODOLLAR UNIVERSITY'S LIVESTREAM NEXT TUESDAY, 7/23 btw 6 - 8 pm ETEURODOLLAR UNIVERSITY'S ANNIVERSARY SALE:https://www.eurodollar.universityhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Another part of the yield curve un-inverted, this time the short to long segment. Demonstrating the perpetual inability to make sense of it, mainstream sources are suggesting some "Trump trade" is behind this. No. Unequivocally no. The classic bull case is building and this is merely the latest nascent signal. It isn't complete yet, but incoming data including today's negative retail sales continues to suggest the same case.Eurodollar University's Money & Macro AnalysisEURODOLLAR UNIVERSITY'S LIVESTREAM NEXT TUESDAY, 7/23 btw 6 - 8 pm ETEURODOLLAR UNIVERSITY'S ANNIVERSARY SALE:https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDUNYT 30-year U.S. bond is back in big wayhttps://www.nytimes.com/2006/02/09/business/worldbusiness/30year-us-bond-is-back-in-big-way.html

It started Friday when China's central bank reported more than just new record low credit stats, the deterioration over the past few months has been astounding. That obviously spread to the Chinese economy which the government confirmed today with ugly data across-the-board, big miss in GDP and grim numbers on retail sales. Yet, everyone wants more "stimulus" that all this data proves didn't stimulate a thing. Something to keep in mind when thinking about upcoming Fed rate cuts.Eurodollar University's Money & Macro AnalysisCNN How ready is China’s military? Dramatic downfall of two defense ministers raises questionshttps://www.cnn.com/2024/07/01/china/china-defense-ministers-downfall-analysis-intl-hnk/index.htmlFxStreet China: GDP miss calls for faster fiscal spending – Standard Charteredhttps://www.fxstreet.com/news/china-gdp-miss-calls-for-faster-fiscal-spending-standard-chartered-202407151119FT China plays down hopes for ‘strong medicine’ at top economic policy meetinghttps://www.ft.com/content/6f4079ea-e8fe-46c8-84b3-75aff56b7011Reuters China June new bank loans miss forecasts, some money gauges hit record lowshttps://www.reuters.com/business/finance/china-june-new-bank-loans-miss-forecasts-some-money-gauges-hit-record-lows-2024-07-12/EURODOLLAR UNVERSITY ANNIVERSARY SALE INFORMATION:https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Why does the Japanese government keep intervening trying to prop up the yen, and why does it keep failing? This isn't just about the yen or Japan, nor is it completely a matter of what's unfolding right now. There is a deeper truth that needs to be made more widely which applies universally to monetary systems around the world. And the yen's crash is the clearest example. Eurodollar University's conversation w/Steve Van MetreCHECK OUT OUR ANNIVERSARY SALE PRICES AT:https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

There was an unnoticed yet absolutely critical detail in the June CPI report that pointed to a lot more than just benign disinflation, a development that has only rarely been observed in decades of history. More disturbing still, the context behind this one is consistent with those few past instances including a few new pieces of subsequent information. Eurodollar University's Money & Macro AnalysisFOMC Transcript April 2010https://www.federalreserve.gov/monetarypolicy/files/FOMC20100428meeting.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The June consumer price estimates at first seemed like good news. Two months in a row at low and now negative changes. But these past two months have shown a little more weakness than most had bargained for, instead so many of the details consistent with recession indications spilling out from all over the economy. No wonder bond yields dropped sharply, though, alarmingly, swap spreads got there well before today. Eurodollar University's Money & Macro AnalysisBLS June 2024 CPIhttps://www.bls.gov/news.release/pdf/cpi.pdfBloomberg Stocks See Big Rotation as Yields Sink on Fed Bets: Markets Wraphttps://www.bloomberg.com/news/articles/2024-07-10/stock-market-today-dow-s-p-live-updatesEURODOLLAR UNIVERSITY ANNIVERSARY SALE PAGEhttps://www.eurodollar.university/anniversary-salehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Chinese authorities are becoming increasingly desperate over their inability to stabilize any of the economy, banking system, or markets. CNY keeps going down, as does the economy. Banks in China aren't lending while dozens are now 'disappearing.' Safety/liquidity of government bonds makes perfect sense. Not to the PBOC which is going to be shorting it by hundreds of billions and this is why.Eurodollar University's Money & Macro AnalysisEURODOLLAR UNIVERSITY ANNIVERSARY SALE PAGEhttps://www.eurodollar.university/anniversary-saleBloomberg Closer Yen, Yuan Correlation Is Danger Sign for Asian Currencieshttps://www.bloomberg.com/news/articles/2024-07-10/closer-yen-yuan-correlation-is-danger-sign-for-asian-currencies?srnd=economics-v2X Video showing Jiangxi Bank 'protest'https://twitter.com/BitcoinNewsCom/status/1810456112652779538The Economist Why Chinese banks are now vanishinghttps://www.economist.com/finance-and-economics/2024/07/04/why-chinese-banks-are-now-vanishingBloomberg China Merges Hundreds of Rural Banks as Financial Risks Mounthttps://www.bloomberg.com/news/articles/2024-01-31/china-merges-hundreds-of-rural-banks-as-financial-risks-mountBloomberg China's PBOC Readies Multibillion-Yuan Pool of Bonds to Sell by Tapping Major Bankshttps://www.bloomberg.com/news/articles/2024-07-05/pboc-readies-hundreds-of-billions-of-yuan-bond-sale-capacityCNN Chinese government bonds are on fire. That’s ringing alarm bells in Beijinghttps://www.cnn.com/2024/07/03/business/china-bond-market-bank-crisis-svb-intl-hnk/index.htmlChina NBS June 2024 CPIhttps://www.stats.gov.cn/sj/zxfb/202407/t20240710_1955508.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

From 'strong and resilient' to 'uh oh' in a heartbeat. The unemployment rate has intruded itself on the soft landing narrative, forcing a near-total rethink of the situation all across the mainstream. Some major bank strategists are now calling for aggressive rate cuts from the Fed at the same time the yield curve is beginning to flash bull. Eurodollar University's Money & Macro AnalysisEURODOLLAR UNIVERSITY ANNIVERSARY SALE PAGEhttps://www.eurodollar.university/anniversary-saleFed Chair Powell testimony (courtesy CBS News)https://www.youtube.com/watch?v=Og8W_VK1gMMFed Chair Powell prepared remarks before Congresshttps://www.federalreserve.gov/newsevents/testimony/powell20240709a.htmCNBC The Fed is ‘playing with fire’ by not cutting rates, says creator of ‘Sahm Rule’ recession indicatorhttps://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.htmlFortune The Fed could slash rates by 200 points over 8 straight meetings as the economy heads for a sharper downtrend, Citi sayshttps://fortune.com/2024/07/07/fed-rate-cuts-outlook-200-points-economy-sharper-slowdown-citi/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Political turmoil in Europe is very easy to understand. The European economy is supposed to be recovering from its unofficial recession, and yet the most recent data shows instead alarming (re)acceleration to the downside in a number of places. Realizing this means the path to clawing back some of the supply shock's price increases is disappearing, voters are simply voting accordingly. Eurodollar University's Money & Macro AnalysisPew Research Center Economic ratings across 34 countries are more negative than positivehttps://www.pewresearch.org/short-reads/2024/06/07/economic-ratings-across-34-countries-are-more-negative-than-positive/World Bank Global trade has nearly flatlined. Populism is taking a toll on growthhttps://blogs.worldbank.org/en/voices/global-trade-has-nearly-flatlined-populism-taking-toll-growthUN Trade and Development Global economic growth set to slow to 2.6% in 2024, just above recession thresholdhttps://unctad.org/news/global-economic-growth-set-slow-26-2024-just-above-recession-thresholdhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Unemployment in the US is now steadily moving higher. The June 2024 employment report contained more substantial downward revisions, evidence more employers are cutting hours, and most concerning is another increase to the unemployment rate. And, contrary to many claims, it's not the "good" kind of rising unemployment.Eurodollar University's conversation w/Steve Van MetreBLS Employment Situation Summary June 2024https://www.bls.gov/news.release/empsit.nr0.htmBloomberg The US Economic Slowdown Is Looking More Threateninghttps://www.bloomberg.com/opinion/articles/2024-07-05/us-jobs-report-economic-slowdown-is-looking-more-threateningFOMC June 2024 Minuteshttps://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240612.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

According to multiple recent reports, banks are very quietly selling out of CRE positions. Those reports are backed up by banking data which clearly shows an inflection in systemic loans in the space. Combined, we have strong evidence showing the second stage of the CRE bust has now started. Eurodollar University's Money & Macro AnalysisReuters Big US banks withstand Fed's commercial real estate shock scenariohttps://www.reuters.com/markets/us/big-us-banks-withstand-feds-commercial-real-estate-shock-scenario-2024-06-26/Federal Reserve Stress Test Results 2024https://www.federalreserve.gov/publications/files/2024-dfast-results-20240626.pdfNYT Office Building Losses Start to Pile Up, and More Pain Is Expectedhttps://www.nytimes.com/2024/06/06/business/office-building-foreclosures-losses.htmlNYT Fearing Losses, Banks Are Quietly Dumping Real Estate Loanshttps://www.nytimes.com/2024/06/24/business/commercial-real-estate-loans.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU