Observations & Charts
That’s 2 days back to back of upside, which is the first time we have achieved this in August. You seem surprised, but yes, this seasonally weak month has caught many people out. Now is this a buy-the-dip moment, and the people that are still on the beach have missed it. Seasonality over the last 20 years shows we can run into month end, only to trade sideways in sept to slightly positive till mid-Sept then the weakness comes till mid-October.
But the good news is on the horizon mid-October is when the run into year-end starts. Anyway, NVDA 0.00%↑ what a rocket yesterday and held the market up even when Yields were higher. A strange divergence in the market yesterday. The explosion higher in the last few hours was impressive. I really do hope for good earnings tomorrow night, but if we don’t, it could get ugly. We also had PANW 0.00%↑ better numbers than feared, Arm IPO being announced overnight and TSMC reaffirming guidance. Everyone is having their say on Jackson Hole but also remember we have a month’s worth of data before that. I’m sure Powell will throw the line in about being data-dependent. With the way yields are moving higher, maybe the hawkish tone is getting priced into the market now. One thing we have to watch is if the yield curves continue to bear steepen. With 10-year yields at 2007 highs, it does send shivers down my spine. Not that we are in the same environment it’s just the timing for me. No data overnight in Asia has seen the indexes rally this morning, which helps sentiment and is also helping the rally in US futures this morning. Yields in the US are slightly lower, which is helping the lift. 2yr yield did breach the 5% again briefly this morning, while the 10yr yield hit another 52-week high.