- Aug 22, 2023
- 4 min read

AAL / HSBC upgrades NVDA / ARM IPO / US debt / Moody's banks / Jackson Hole & BRICS meeting

BRICS meeting bombshell would is Saudi Arabia joined in, the market will notice if they did, if not the whole BRUCS new currency story is just a little story that makes media talk... Ieven if they joined they would still play both sides (West and BRICS) not to upset anyone.. >>> "If we expand BRICS to account for a similar portion of world GDP as the G7, then our collective voice in the world will grow stronger." China official
Given the high level of govt debt in the US and others, investors are demanding higher compensation for the risk >>> sounds pretty reasonable ! was always going to be the case once QE finished let alone QT starting, U.S Debt getting pretty expensive, US 10y REAL yield exceeds 2%, highest since 2009
JPowell's message on Friday is most likely to be 'balanced', that is perhaps what many wish, the risk is he talks and acknowledges and sort of gives the ok to 'the' new normal higher for longer-term yields...'' something that has grown in Mr Market's mind last 10days or so with the bond move in the long-end
The vice chair of the FOMC recently made quite clear he doesn't think r* has shifted up / Thread from Timiraos below
UK property sellers cut asking prices at sharpest pace this year (good news!)
German central bank sees the economy stagnating again in the 3rd quarter - AP
HSBC just raised NVDA target to $780, highest on the street, earlier in the year, HSBC had the only 'sell rating' and lowest target at $136
Wild image of Chinese EV graveyard
Goldman Sachs weighs in on the trajectory of the USD/JPY currency pair, focusing on its correlation with US yields and the potential risks and factors influencing its direction
Beijing called Joe Biden's summit with the leaders of South Korea and Japan an "attempt to sow discord" among the Asian nations, claimed the group "smeared and attacked China" on things like Taiwan situation
BOJ's Ueda says explained to PM Kishida July tweak to yield control
SoftBank's semiconductor unit Arm filed for what is set to be the year’s largest US IPO, a 32y old company..
Moody's is downgrading the credit ratings of 10 small- to mid-sized banks, citing growing financial risks and strains that could erode their profitability. The credit ratings agency also warned it is watching some of the nation's biggest lenders for potential downgrades
From Bloomberg: “US 10-year TIPS yields pushed at the 2% level Monday, a psychological barrier not seen since 2009. And it’s not alone. In country after country, inflation-linked bond yields are climbing to new highs.” As to why, the drivers being cited — and no one knows for sure — go from the benign to those implying headwinds for the economy, markets and policies
American Airlines pilots ratify a new contract that includes big pay raises and bonuses
Pilots at American Airlines have approved a new contract that will raise their pay more than 40% over four years!.. it's the same in many places, very visible to most, get into the public eye and others want the same, naturally, hard not to call it wage spiral!

Markets :

Equity markets breathed a little from oversold short-term levels, Banks not doing well, in fact Citi closed on lowest levels of 2023, same low levels than the SVB mid March lows, regional bank ETF is basically flat since the SVB blow-up, NVDA rallied strongly ahead of earnings tomorrow after the bell ! TSLA also run up nicely.
USD stable to slightly higher, mainly USDJPY., CROSSJPY higher on higher yields globally
Bonds, duration hit again ahead of JacksonHole Friday >>> not only is the 10yr UST yield at a 15y highs, but at slightly over 3years, it is also the longest correction of any since the early 80s bond bull market began