Core Insights - The labor market remains resilient, leading to increased Treasury yields and a shift in expectations regarding Federal Reserve interest rate cuts [1][2][6] Economic Data Impact - Weekly jobless claims were lower than expected, and quarterly economic growth exceeded forecasts, contributing to a rise in short-maturity rates [2][3] - The two-year yield increased by approximately 3 basis points to 3.67%, marking the highest level since early September [2] Market Sentiment - Traders have slightly reduced their expectations for interest rate cuts by the Federal Reserve, moving away from fully pricing in a quarter-point cut in late October [3][6] - Despite the current economic data not supporting further rate cuts, some analysts still anticipate cuts in October and December due to a weakening labor market [4] Treasury Yield Movements - The 10-year note yield rose by 3 basis points to 4.17%, while the 30-year yield was around 4.75%, resulting in a flatter Treasury curve [5] - The yield gap between five and 30 years fell below 1 percentage point for the first time since August 11, indicating market skepticism about the Fed's ability to implement a series of rate cuts [5] Future Rate Expectations - Analysts suggest that without significantly weaker economic data, it is unlikely for 10-year yields to drop below 4% in the near term, with rates expected to fluctuate within the 4% to 4.25% range [7]

Core Viewpoint - The Federal Reserve's current policy is considered too restrictive, with calls for more aggressive rate cuts to support economic growth and mitigate potential unemployment risks [2][3][28]. Economic Growth Outlook - Steven Myron expresses a more optimistic view on economic growth compared to some colleagues, citing factors such as tax incentives and deregulation that could enhance the economy's potential output [12][14]. - The expectation for economic growth in 2025 is tempered due to weaknesses observed in the first half of the year, although a rebound is anticipated in the latter half [16][17]. Rate Cut Expectations - Myron advocates for a series of 50 basis point cuts to quickly adjust the monetary policy towards a neutral stance, arguing that the current rates are 150 to 200 basis points too restrictive [27][30]. - The expectation is that as the Fed cuts rates, mortgage rates will also decrease, despite recent trends showing long-term rates rising [24][25]. Inflation and Tariffs - There is skepticism regarding the impact of tariffs on inflation, with Myron noting a lack of evidence for tariff-driven inflation increases [5][32]. - The Congressional Budget Office projects nearly $400 billion in annual tariff revenues, which could influence the supply-demand balance for loanable funds and lower neutral rates [19]. Population Growth and Labor Market - Significant changes in population growth due to immigration policies are highlighted as a critical factor affecting economic outcomes, with potential implications for labor market dynamics [6][8][20]. - Myron suggests that negative net migration could lead to a positive shock in the supply of shelter, impacting rent inflation positively [21][22].

Market Trends & Economic Data - US economy shows strength with jobless claims less than expected and GDP growing more than economists anticipated, led by fewer imports and robust consumer spending [5] - There's an approximately 85% probability of a 0.25% rate cut at the October meeting, down from over 90% previously expected [6] - The US dollar is trending upwards, increasing by about 0.3% this morning and almost 1% in the last 5 days [6] - Investors are closely monitoring economic data for signs of a more subdued Fed, reinforcing the market's expectation of rate cuts [8] Company Performance & Strategies - Starbucks is laying off 900 employees as part of a $1 billion restructuring plan and closing approximately 1% (100 stores) of its store base [10] - Starbucks aims to reinvest in creating a coffee house culture with more staff and a better consumer experience [14][15] - Charles Schwab clients are highly engaged, with trading up about 30% year-over-year, increased margin balances, and more options usage [31] - Charles Schwab plans a significant push into the crypto space in early 2026, launching spot crypto in the first half of next year [30][52] Investment & Market Outlook - Analysts suggest Oracle stock could potentially decline by about 43% [9] - Barclays believes the AI theme remains strong, comparing it to the dot-com bubble but noting key differences such as stronger financial footing for hyperscalers [24][25][26] - Charles Schwab sees a renewed interest in fixed income among retail investors, driven by declining money fund yields [40][41]

Core Insights - Volta Finance reported a net performance of -0.8% for August 2025, with a year-to-date performance of +3.2%, underperforming compared to US High Yield and Euro High Yield returns of +6.3% and +4.0% respectively [4][5] Performance and Economic Context - Economic indicators showed a mixed picture in August, with weak labor market signals and high valuations in the tech sector raising concerns about economic momentum [5] - Inflation data remained elevated but aligned with expectations, leading to speculation about potential Federal Reserve rate cuts [5] - The Bank of England surprised markets with a rate cut to 4%, the lowest in over two years, amid ongoing inflation and political uncertainty [5] - Credit markets remained stable, with minor changes in spreads for Itraxx Xover and CDX indices [5] Loan and CLO Market Activity - The loan market saw significant repricing, with 28% of the market repriced year-to-date, resulting in approximately 20 basis points of spread compression [6] - Volta received an early redemption of approximately €7 million from a European CLO Equity position and reinvested €5.7 million into a Euro CLO debt tranche [7] Portfolio Performance - Volta's CLO Equity tranches returned -1.1%, while CLO Debt tranches returned +1.2% [8] - The EUR/USD exchange rate shift impacted long dollar exposure, contributing to a performance decline of -0.34% [8] Financial Position - As of the end of August 2025, Volta's Net Asset Value (NAV) was €271.8 million, equating to €7.43 per share [9] - Cash flow generation remained stable at €28 million equivalent in interest and coupons over the last six months, representing nearly 21% of August NAV on an annualized basis [7]

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Market Overview - U.S. markets showed mixed signals with Wall Street cooling after record highs, while Asian markets surged driven by AI optimism [1][2][3] - Gold prices reached a new record above $3,750 an ounce, reflecting a nearly 9% increase this month as investors seek to hedge against uncertainty [3][4] Company Developments - Nvidia announced a significant investment of up to $100 billion in OpenAI, marking a strategic partnership in the AI sector [4] - Apple experienced a 2.4% surge in stock price due to strong demand for the iPhone 17, while Tesla and Nvidia continued to see gains [2] Regulatory and Political Impact - The proposed $100,000 H-1B visa fee by the Trump administration has caused concern among tech companies and banks that depend on foreign talent [2] - Disney is set to return comedian Jimmy Kimmel to late-night television following a suspension related to controversial comments, indicating potential regulatory scrutiny in the entertainment sector [5] Investment Trends - U.S. pension funds and households are holding a record share of equities in their overall assets, raising questions about the sustainability of this trend [6]

Market Overview - Major indexes experienced a volatile start to the week, with the Nasdaq leading a recovery that also benefited the Dow and S&P 500 [1] - Despite the recovery, concerns over a potential government shutdown limited market activity, with Congress yet to finalize a funding plan [2] - The previous week saw record closes for major indexes, with the Russell 2000 small caps reaching a new high for the first time since 2021 [2] Economic Indicators - The Federal Reserve's recent quarter-point rate cut is factored into market expectations, with traders anticipating two additional cuts by year-end and more in 2026 [3] - Future market gains are expected to rely more on solid economic data rather than solely on rate adjustments [3] Precious Metals Performance - A short squeeze contributed to a rise in equities, with Nvidia's stock increasing by 4% following a strategic partnership with OpenAI [3] - Precious metals outperformed other sectors, with gold rising by 2% to a record above $3,780 and silver increasing over 2.5% to surpass the $44 mark [3][7] Bond and Cryptocurrency Trends - Bond yields saw a slight increase, while Bitcoin fell to approximately $111,000, marking a two-week low [4] - The market has largely ignored the typical volatility associated with September, raising questions about the sustainability of current momentum [4] Trend Tracking Indexes (TTIs) - The major indexes managed to recover from a weak opening, with precious metals showing significant gains [7] - As of September 22, 2025, the Domestic TTI was +6.04% above its moving average, while the International TTI was +11.37% above its moving average, both indicating a bullish trend [8]

We'll go to the markets here as we watch the first trading day of a new week and we're modestly green. The dust now settling from the rate cut which leaves us Joe where Goldman Sachs is David Cen today raising his 12 month S&P target. Raised a few of them but the 12-month target is now 7200.It is Goldman's Tony Pascarella who makes the call I referenced at the top of the show today too. Don't fight it. Don't chase it.Do I love the positioning setup and tactical riskreward. I don't. With that, uh, do I think ...

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