1. Probability of 50 Basis Point Cut
Fundstrat
As implied by Fed Funds futures trading, market consensus regarding the Federal Reserve’s rate cut plans for September 18 is now split between expectations for a 25 bp cut or a 50 bp cut. As shown by our Chart of the Week, implied odds of a 50 bp cut plunged from 65% to 27% on Friday after the jobs report and is one possible reason why stocks also fell on Friday. Nevertheless, this is still a dovish Fed. As Head of Technical Strategy Mark Newton notes, “If we look further out, the market anticipates roughly 200 basis points of cuts by next June, expecting the Fed to start taking rates down quite sharply.” He asked rhetorically, “Would you really want to see a 50 bp cut at the next FOMC meeting? That arguably would mean the Fed knows something that we all don’t, because that’s a very big cut in an election year.”
Chart of the Week
2. History of Yield Curve Inversion Ending
No idea what happens but interesting note from Charlie Bilello
@Charlie Bilello The longest yield curve inversion in history has ended with the 10-year Treasury yield (3.71%) now 6 bps above the 2-year yield (3.65%).
What does this mean for the economy?
Historically, the flip back to a positive sloping curve after a long inversion has occurred near the start of recessions:
-March 2007 flip back: recession began 10 months later, in January 2008.
-December 2000 flip back: recession began 4 months later, in April 2001.
-June 1989 flip back: recession began 13 months later, in August 1990.
-October 1981 flip back: recession began 2 months earlier, in August 1981.
-May 1980 flip back: recession began 3 months earlier, in February 1980.
3. 10 Year Treasury Yield Hit 3.36%
4. Bitcoin ETFs Posting Streak of Outflows
From Dave Lutz at Jones Trading
US Bitcoin exchange-traded funds have posted their longest run of daily net outflows since listing at the start of the year, part of a wider retreat from riskier assets in a challenging period for global markets. Investors pulled close to $1.2 billion in total from the group of 12 ETFs over the eight days through Sept. 6, data compiled by Bloomberg show
https://am.jpmorgan.com/us/en/asset-management/institutional/
5. AI Venture Raises Over $1B
Market Ear Blog
https://themarketear.com/newsfeed
6. Large Value Outperforming Large Growth Q3
Christine Idzelis-Marketwatch
7. Nuclear Generates 18.6% of U.S. Electricity
Barrons
America’s 94 nuclear reactors generate 18.6% of U.S. electricity, enough to power 72 million homes. They’re the largest single source of carbon-free energy in the country. But nuclear’s share of total electricity generation has been ebbing for years, after peaking above 20% in the 1990s. A dozen U.S. reactors shut down from 2012 to 2021.
The tide is turning. Six reactors slated to close from 2021 to 2025 have been saved through state and federal action. And three reactors that were closed and decommissioned may be restarted, which has never happened before. Gates’ nuclear company, TerraPower, is preparing the site of a retired coal plant in Wyoming for a new reactor with more than $2 billion in government financing, and two Altman-backed companies are testing nuclear technologies. The Biden administration has announced a goal to triple the nation’s nuclear capacity by 2050.
8. Cameco Nuclear Stock -35% from Highs
50day thru 200day to downside in August
9. Global Percentage of Homes with Air Conditioners
Torsten Slok, Ph.D.Chief Economist, PartnerApollo Global Management
According to data from the International Energy Agency, 90% of homes in the US have air conditioning, but only 10% of homes in Europe and 5% of homes in India, see chart below. For China, the number is 60%.
10. 24/7 Presidential Election News Cycle—Meanwhile Only 50% of Americans Vote
The Daily Stoic
They are frustrating and awful, in some cases absolutely vile. The situation is corrupt. The results, unacceptable. You’re upset. You have every right to be.
We deserve better. Our children deserve better—better politics, better government, better policies.
In the last couple election cycles, a curious thing happened as former President Barack Obama laid out the very real—and in many cases nonpartisan—frustrations that people have with their government these days in front of an audience: the crowds started booing. Not booing at him, but booing at the situation. Each time, he has replied by stopping them. “Don’t boo,” he says, “vote.”
The Stoics have been involved in politics since the days of ancient Greece and they no doubt would have witnessed a certain timeless tendency in democracies: People will complain. People will get angry. But you know what they can’t be bothered to do? Their most basic civic obligation. They’ll chatter about politics. They’ll talk about how they’d like things to be, how they should be, but they won’t vote! (Today, roughly 50% of eligible Americans vote. Just half!)
The task of the philosopher, Epictetus said, was to focus on what we control. We don’t control much, but we do control whether we register to vote and whether we bother to show up. Will our vote be decisive? Will the politicians listen? That’s not up to us, really. And even if it was, it doesn’t matter until after we vote.
Don’t boo. Don’t complain. Be an adult. Go read up on the candidates. Watch the debates tonight. Check them for the virtues necessary in a leader. Examine their platform for bullshit and demagoguery. Understand no one will check every box, but pick the one you can best trust with the responsibilities of power and the common good. Go do your job.
Vote. https://dailystoic.com
