If you don't know why I refer to FT's Katie Martin as the Toothfairy... you gotta brush up on recent bitcoin lore. (She objected to bitcoin by saying her teeth were scarce, betraying ignorance of both of money _and_ economics at the same time.)
Anyway, today she's out celebrating the strength of the (US?) stock market... somewhat sarcastically, we might infer.
The US is on holiday today but Friday brought a monster payrolls report, with 162,000 jobs added in August, well beyond expectations, while the previous month’s 23,000 jobs loss was revised to a gain on a similar scale. Maybe the “bonds are down because growth is great” crowd was on to something after all?
Nobody told the markets things are shit
Government bonds have been through the mincing machine because of either unsuitable monetary policy or unsuitable fiscal policy or both (depending on who you speak to), or maybe a bit of inflation. Whatever the reason, much wailing and gnashing of teeth among those fun sponges in macro. Brace for the coming “great repression”, warns the IMF.
Also: wooops? Dissected jobs number not thaaaat good
...Aaaaaand:
As if that’s not enough doom and gloom for you, the move by the Dutch central bank to hoick 78 tonnes of its gold out of New York and over to London is a pretty dire assessment of global trust in the US administration.
"Over in stocks, however, it’s a whole other universe, filled with puppies and flowers, and while it’s not super unusual for different asset classes to throw off different signals, the dissonance is quite pronounced"
Investors have learnt to stop worrying and love the stock market because corporate leverage is relatively low, and earnings are still ripping. But this was the level of enthusiasm out there in the wild even before Friday’s US jobs report
...and this is a fed independence flex I'd love
we really have to assume the next move from the Federal Reserve later this month is a rise in interest rates. (Although Donald Trump was quick on Friday to call, yet again, for lower rates in response to the jobs numbers. Certainly, for Fed chair Kevin Warsh, starting a rate-rising cycle just a few weeks ahead of the US midterm elections would be . . . a flex.) Assuming orthodox policymaking prevails, then what?
Archive: https://archive.md/https://www.ft.com/content/b122bc9f-9f51-46b8-9f42-dba9fb29244c