Inflation & Monetary Policy - A new regime for inflation and bond yields is anticipated [2] - The economy slowing down could help pull inflation down, but this scenario is undesirable [2] - The Federal Reserve might consider rate cuts with inflation above target and a softening job market, similar to the 1995 scenario where 325 basis point (3.25%) insurance cuts occurred with inflation at approximately 2.3% [3] - A rate cut in September is largely priced in, making it difficult for the Fed to argue against [4] - Jackson Hole symposium later in August (August 21st-23rd) is expected to provide more clarity on the Fed's leaning [5] Economic Data & Analysis - US government data is considered the best globally, with dedicated efforts to ensure data accuracy [1] - Bloomberg Intelligence suggests that a CPI print of 0.2% on the headline indicates the PC print will allow the Fed to ease in September [5] - Modernizing government data collection is necessary but challenging, requiring resources and careful consideration to avoid disrupting historical data analysis [7][8] - Budget cuts to the Bureau of Labor Statistics (BLS) have reduced resources for data modernization [8] - Firing the head of the BLS is viewed as performative and damaging to the credibility of U S institutions [9]

Market Trends - China's 30-year bond yields rose to the highest since April [1] - Hopes of better trade ties spurred by President Trump's extension of a tariff truce [1]

Well, let's go from chips to the credit markets. Wall Street's watching closely as the Treasury hits the market with its latest 30-year bond auction. Investors are parsing demand for long-term debt amid rising deficits, shifting rate expectations, and of course, the economic outlook is uncertain.Rick Santelli joins us now from Chicago. Rick, what do you have. >> Yeah, you know, there is a lot to unpack there.Let's start at the beginning and let the charts do some talking. If you look at twos and tens since ...

Bond Market & Yields - The 10-year yield remains stagnant at 446%, mirroring levels from November, indicating a lack of movement in borrowing costs [1] - Despite positive economic data, bond yields experienced an initial rise followed by a slight decrease, influenced by technical factors [4] - Key psychological levels for yields are identified: just under 2% for 2-year, 450% for 10-year, and 500% for 30-year maturities [5] Economic Data & Fed Policy - Retail sales show a healthy rebound, and initial jobless claims hit a three-month low at 221000 [2][3] - Market expectations for Fed funds imply less easing, shifting from over two quarter-point cuts to 170% [3] - Strong economic data initially pushed yields higher, aligning with typical market behavior [4] Dollar Index - The dollar index is nearing a one-month high, approaching the significant psychological level of 100 [7] - Increased interest rates and a decent labor market contribute to the strengthening of the dollar index [6]

Japan’s opposition parties played down concerns over plans to cut taxes that have contributed to recent rises in bond yields ahead of Sunday’s upper house election. https://t.co/qekmOwRWYF ...

An intramarket sector spread is used to compare the bond yields of different companies in the same industry. Learn how it can help you understand the market. https://t.co/t0FBywgkxk ...

Market Trends - Germany's 30-year bond yields reached the highest point since 2023 [1] - Investors are selling long-end debt due to concerns over tariffs and extra government spending [1]

Ghana’s domestic bond yields extended declines on Thursday after the West African nation reported inflation dropped to the lowest in more than three years. https://t.co/B3v0xhdVjF ...

Bloomberg Daybreak Europe is your essential morning viewing to stay ahead. Live from London, we set the agenda for your day, catching you up with overnight markets news from the US and Asia. And we'll tell you what matters for investors in Europe, giving you insight before trading begins. On today's show, the US agrees a trade deal with Vietnam, cutting tariffs on Vietnamese exports from 46% to 20%. Stocks in Asia fluctuate on the news, after the S&P 500 set yet another record. Traders now look ahead to the ...

Investment Rating - The report maintains a 12-month S&P 500 return forecast of 10%, targeting a level of 6500 [2][3]. Core Insights - The S&P 500 rose by 2% this week, driven by a delay in EU tariffs and a favorable US court ruling regarding tariffs [2][3]. - Rising bond yields, particularly the nominal 10-year US Treasury yield at 4.4%, are a significant concern for equity investors [2][4]. - The report emphasizes that the relationship between bond yields and equities is influenced more by the drivers of yield changes rather than the absolute level of rates [2][7]. - Elevated bond yields are expected to constrain potential S&P 500 valuation expansion, with a 100 basis point change in real Treasury yields correlating to a 7% change in S&P 500 forward P/E [2][27]. - Most S&P 500 debt is fixed-rate with maturities beyond 2028, minimizing the risk to earnings from elevated bond yields [32][33]. Summary by Sections Economic Outlook - The nominal 10-year US Treasury yield is projected to end 2025 at 4.5% and slightly increase to 4.55% in 2026, reflecting below-trend economic growth and above-target inflation [18][19]. - The report indicates that the market's focus on US fiscal outlook remains critical, especially following recent legislative developments [19][21]. Equity Performance - The report highlights that equities typically perform well when bond yields rise due to improved growth expectations, but struggle when yields increase due to fiscal concerns [7][14]. - The S&P 500 currently trades close to fair value, supported by strong corporate fundamentals, particularly among large-cap stocks [26][27]. Investment Recommendations - Investors are advised to avoid stocks with weak balance sheets, as these have underperformed compared to those with strong balance sheets [40][41]. - The report suggests rebalancing baskets of Weak Balance Sheet and Strong Balance Sheet stocks, as well as Interest Rate Sensitive stocks, which have outperformed amid rising bond yields [40][41].