Core Viewpoint - The nomination of Kevin Warsh by President Donald Trump to lead the Federal Reserve is causing market volatility, particularly affecting stocks, Bitcoin, and gold prices due to concerns about potential changes in monetary policy [1]. Group 1: Market Reactions - The markets are reacting negatively to Warsh's nomination, with significant impacts observed in precious metals, indicating a potential bubble being punctured [1]. - Stocks, Bitcoin, and gold are all experiencing fluctuations as investors reassess their positions in light of the new Fed leadership [1]. Group 2: Historical Context - The article references former Federal Reserve Chair William McChesney Martin's perspective on the central bank's role, suggesting that Warsh's nomination aligns with a more hawkish approach to monetary policy [1].

Let's talk about the market reaction to all of this. Joining us this morning, Paul Hickeyi, co-founder at Bespoke Investment Group. Paul, it's great to have you back.Good morning. >> Good to be here. How you doing, Carl.>> I'm good. Uh, meantime, Hassets's on the tape as well. Do not expect mass layoffs from AI.How would you judge the market's ability to sort of game out all of these crazy long-term crossurrens. >> You know, I mean, I think there there are a lot of crossurrens and as we're talking about, th ...

Market Reaction to FOMC - The market tends to react to FOMC announcements, often with an initial reaction that is the opposite of the eventual trend [1] - The initial market reaction to FOMC news is often a liquidation event designed to clear the way for the true direction [2] - Observing the initial reaction to FOMC announcements may provide insight into the actual market direction [3] Bitcoin Trading Strategy - Bitcoin's price action often reverses after the initial reaction to FOMC announcements [2] - A Bitcoin rally into FOMC news may be followed by a dump, and vice versa [2]

Market Expectations - Options market indicates anticipation of a calmer-than-normal market reaction to the Fed's policy decision [1]

Market Reaction to Economic Data - Initial limited market reaction to hot PPI and tame claims data [1] - Market opinion diverges from Fed speak, prioritizing job numbers over inflation data [3][4] - Dollar index slid after weak jobs report and failed to recover, indicating market sentiment [4] Interest Rate Expectations - Two and ten-year Treasury yields initially rose following the hot PPI data, increasing by approximately 005% to 006% [2] - Market anticipates a rate cut in September, based on Fed fund futures [5] - Fed fund futures pricing of 55% or higher three to five sessions before a meeting typically leads the Fed to align with market expectations [4] Jobs Report Impact - Poor jobs report for July, including negative revisions, had a significant impact on the market [3] - Market reaction to the jobs report was more pronounced than the reaction to inflation data [3]

🇺🇸 TODAY: The CPI data drops at 8:30 AM EST.How will the market react? https://t.co/JK0xvRtx2U ...

Market Reaction & Data Trust - Market is likely to react to recent data revisions, but a significant fallout is not immediately apparent [1][2] - The market was surprised due to lower volatility and liquidity during the summer months [2] - The industry continues to trust the data, acknowledging that some data points are estimates that are backfilled later [5] - Every report needs to be scrutinized in the context of the Federal Reserve's policy shift [6] Labor Market & Economic Narrative - The focus remains on the labor market, specifically the absence of increased layoffs [3] - The prevailing narrative is that employers are hoarding labor [4] - The market perceives the labor market as more critical than inflation, a sentiment telegraphed by the Federal Reserve [8] - Fears of the Federal Reserve being behind the curve are expected to escalate [9] Inflation & Federal Reserve Policy - Incremental inflationary pressures are considered less of a concern, with a return to the "transitory" narrative [10] - Political challenges of elevated unemployment are expected to be more concerning to the Federal Reserve [11] - It's possible the Federal Reserve would have acted differently on rate policy with correct data [8] Investment Strategy - Current guidance advises clients to remain overly diversified across risk spectrums [12] - Fixed income acted as a ballast during the equity drawdown, and foreign markets have been supportive [12] - The industry is constantly seeking opportunities to add or reduce risk based on the evolving environment [13]

Geopolitical Risk & Market Reaction - The market reaction to the US strikes on Iran's nuclear sites was surprisingly muted [1][3] - Poly market estimates a 23% probability of Iran attempting to close the Gulf of Hormuz by July [4] - Successful military action by Israel and the US could give China pause regarding its intentions for Taiwan [9] - The market is balancing the positive aspects of neutralizing Iran against the risks of retaliation [8][10] Economic Factors & Investment Strategies - The market believes it can handle a 10% general tariff and 30% tariff on China, assuming it doesn't worsen [11] - New all-time highs in the S&P are attainable in the next several weeks, barring significant action by Iran [12] - Companies may leverage AI to offset the higher prices resulting from tariffs, increasing efficiency and margins [13][15] - Investment opportunities may lie in the potential users of AI who can significantly increase operational efficiency, rather than solely in AI suppliers [14] Middle East Situation - The damage done to Iran's nuclear capabilities has likely set back their progress towards producing a bomb [6] - Neutralizing the Houthis and securing shipping in the Red Sea and Hormuz are key considerations [5]

right now. >> So whether they're less dangerous or more dangerous because you have a regime that's in peril, let's bring in David Zervos, Jeffrey's chief market strategist, to this conversation. As we mentioned, Halima is still here with us.So is Mike Santoli. David, I want to get your thoughts on this, especially given the fact that we are tonight, even though there are a lot of known unknowns, that tonight it is a muted response in stock futures and oil is higher but not surging. >> Morgan I think it's mo ...

Geopolitical Risk Assessment - Market participants are attempting geopolitical analysis, but accuracy is limited due to uncertainty surrounding Iran-Israel tensions [1][2] - Despite direct missile exchanges between Iran and Israel, the market showed resilience, with only a slight dip [2][3] Market Reaction & Positioning - The market's reaction to geopolitical events was not significantly negative, suggesting potential opportunities in fixed income [4][5] - The market's lack of strong reaction indicates that risk asset positioning is not overly committed [8] - There was an emotional liquidation of US risk asset positioning during April and May, setting the stage for a potential market recovery [6] Economic Factors & Outlook - The market may be underestimating the positives from deregulation, fiscal policy, and trade negotiations [7][8] - A fiscal bill with pro-growth features is expected to pass [8]