Musings only. Chief Macro Strategist @CarsonGroupLLC. Advisory services through CWM, LLC, Registered Investment Advisor. Manage $7B+ for clients.
Chicago
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The Fed's rate hike decision is going to come down to 2-3 bps 🤦♂️
Meanwhile, from PPI data
Private capital equipment: +4% y/y (3M annualized @ 4%)
Electronic computers & equip: + 23% (3M @ 75%)
Electronic components: +28% y/y (3M @ 13%)
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Is it a bird, is it a plane?
No, it’s the US 10-year (now at 4.89) 🦸♂️🚀
Need Scott Bessent to throw some more kryptonite on this thing 😀
Btw ... none of this should be a surprise
carsongroup.com/insights/blo……
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I know the general sentiment is higher yields are “bad for stocks”
But given all of this, plus the enormous AI-related capex, the only surprise is that the S&P 500 is up just 13% year-to-date, and breadth isn’t better than it already is
@RyanDetrick
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Copper just hit a new all-time high
Diesel prices at an all-time high
Nominal GDP growth hit 8% in Q2 & likely to run > 6% in Q3
The labor market is also fine
Yet somehow the odds of a September rate hike ~ 60% and just one hike priced in by year-end
Party-time 🎉
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Amazing that Sept rate hike probability is ~ 60%, i.e. near coin toss odds
Meanwhile, activity is running hot, boosted by the industrial side 🔥
Hiring in cyclical sectors also looking good 👍
New blog 👇
@CarsonResearch @RyanDetrick
carsongroup.com/insights/blo…
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Sonu Varghesee retweeted
Diesel at record high
ISM PMI reports had manufacturing and services price indices > 70
Copper, steel, GPUs, memory, electronics & electrical equipment all in short supply
Yet … we’re going to focus on the second decimal point of August CPI to gauge inflation progress 🤦🏽♂️
BREAKING: according to GasBuddy data, the live U.S. national average price of diesel has set a new record: $5.820/gal, surpassing the previous daily $5.819/gal all-time high that occurred June 17, 2022. (9/3/26 3:25pm ET)
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Sonu Varghesee retweeted
Thanks to @FINTECHTVglobal and @RemyBlaireNews for hosting me at the NYSE today
We covered a lot 👇
Even after Kevin Warsh's hawkish Jackson Hole speech, Fed rate hike odds only hit 65%, closer to a coin toss than a lock.
@sonusvarghese of @CarsonGroupLLC tells @RemyBlaireNews Governor Waller was encouraged by the last two inflation prints, and the Fed now looks willing to "run things hot for a little bit longer."
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Sonu Varghesee retweeted
Will be live from the NYSE 👇
Joining @RemyBlaireNews this morning:
- Andy @Baehr, @GSR_io
- Marie Myers, @HPE
- @sonusvarghese, @CarsonGroupLLC
- @ambresoub, @KaikoData
- @EliBenSasson, @StarkWareLtd
Live from the Big Board.
nitter.net/i/broadcasts/1oJMvNleY…
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Sonu Varghesee retweeted
This is interesting from @StocktonKatie
In fact, I’d argue the same reason that keeps credit spreads tight is what’s pushing treasury yields higher, i.e. a huge pickup in nominal growth
If credit spreads were widening in a worrisome way, yields would likely go lower
10-year U.S. Treasury yields are testing major resistance at 4.75%, and the prospect of a breakout appears to be weighing on market sentiment. But credit isn’t flashing a warning from a technical perspective (yet).
Historically, spreads have more often widened as Treasury yields have fallen, so a sustained upturn in credit spreads is a more meaningful risk-off signal than a yield breakout or the psychological 5.00% threshold.
#fairleadstrategies
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10yr now at 4.81 🔥
Feb 27th (pre-war)
10y: 3.94
WTI: $67
Apr 7
10y: 4.29
WTI: $113
Jul 2
10y: 4.48
WTI: $69
Oil up, yields up
Oil down, yields up
It’s not just “oil”
Maybe yields should be higher (a lot higher) for other reasons 👇
@RyanDetrick
carsongroup.com/insights/blo……
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ISM Manufacturing PMI points to inflationary growth, with headline @ 54.6
Production @ 58.3 💪
Prices @ 71.1 🔥
Comments dominated by price complaints, but several on strong sales 👍
Amongst commodities in short supply: copper (prices up 38% y/y)
@RyanDetrick @CarsonResearch
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ISM Manufacturing PMI smoking @ 54.0 (+1.3)🔥
Highest since May 2022 🙌
New Orders: 56.8
Production: 54.3
Prices: 82.1
Deliveries: 60.6 (slowing)
Every comment brings up prices. Zero commodities down in price!
Inflationary growth 🚀
@CarsonResearch @RyanDetrick
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Huge difference between nominal & real consumption now. Annualized👇
Nominal 🔥
April: 6.3%
3M: 9%
Real
April: 1.3%
3M: 2.8%
Real spending hanging in there on the back of rebounding auto sales, but also means consumers are making big ticket purchases despite inflation
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Consumers following momentum too 🙌
Close to a record high (55%) expecting higher stock prices over the next 12M (long-term average ~ 37%)
While 25% expect lower stock prices (long-term average ~ 28%)
@CarsonResearch @RyanDetrick
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Headline PCE +0.4% in April ~ 4.9% annualized
Last 3M: 6.0%
12M: 3.8%
Core PCE was "soft" at 0.24% but that's 2.9% annualized 🤦♂️
3M: 3.8%
12M: 3.3%
Core components with 3%+ inflation expanding😬
Dec '19: 24%
Jun '22: 72%
Apr '25: 41%
Apr '26: 53%
@RyanDetrick @CarsonResearch
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Durable goods inflation faster than anything outside of Covid 🤦♂️
12M: 3.4%
1996-'20 avg: -1.9%
Partly due to AI bottlenecks. PCE computer software & accessories 👇
Apr: 5%
3M: 83% (ann)
12M: 14%
Services also elevated despite housing normalizing 😬
12M: 3.5%
1996-'20 avg: 2.5%
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As long as the Fed maintains this view and keeps things on hold, and real rates don’t climb, stocks should continue hitting new record highs 🚀
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Good chart via @dailychartbook
S&P 500 Momentum has gotten the market almost perfectly right, vis a vis longs and shorts 👇
Now we see how long it lasts 🤞
nitter.net/sonusvarghese/…
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