literally crazy

market vibes

July 29… )

“Mr. President, we are rapidly approaching a moment of truth both for ourselves as human beings and for the life of our nation. Now, truth is not always a pleasant thing. But it is necessary now to make a choice, to choose between two admittedly regrettable, but nevertheless *distinguishable*, postwar environments: one where you got twenty million people killed, and the other where you got a hundred and fifty million people killed.” General Buck Turgidson 1964

Data today includes the US trade balance at 8:30, expected flat with May at -$97 billion came in -$86 billion.

Case-Shiller housing price indexes expected flat to lower. JOLTS today at 10:00.

A 7-year note auction at 1:00 PM. API petroleum inventories at 4:30; consensus estimates are a -2.5 draw in crude.

In the news

Russia’s Medvedev posted on X that Trump was playing an "ultimatum game" with Russia, emphasizing two points: "1. Russia is not Israel or even Iran. 2. Each new ultimatum is a threat and a step towards war. Not between Russia and Ukraine, but with [Trump’s] own country."

Fidelity thinks gold will rally to $4,000/toz next year for the usual reasons: USD, trade issues, and geopolitical tensions.

OPEC remains on track to increase production by 548,000 bpd in August, although the JMMC noted some members have not increased production yet, which has “muted the market impact of these headline figures.”

Moneyball! The MLB is debating a salary cap to balance talent around the leagues. Players hate the idea. But the Moneygame hasn’t changed since 2002 when the A’s won 20 games in a row. High-revenue teams can pay players like Juan Soto $50 million a year. The Marlins’ entire salary roll is about $70 million in 2025. The A’s are still on the bottom or close to it.

MRK reported an earnings beat and a revenue miss this morning. Paypal beat. Visa this afternoon. From what I read the Q2 season is mixed with strong growth in banks and modest growth in select names and some stink bombs. Big names tomorrow and later in the week.

In the markets

The Euro, which is the primary source of strength in DXY (57% of the index), seems to have stabilized pending data this morning and the FOMC’s day-one meeting. Leaks? The markets will tell us.

December Gold looks stable in the lower end of its recent range. I doubt it will go far either way today, with the outside chance of a mutinous cut tomorrow. Other metals are steady and quiet with very little change in development. Copper OI rising on trend, Platinum OI still declining on trend, silver OI is typically flat.

Gold is trading about $25 below its 30-day POC at $3,375ish.

In oil prices, WTI is unchanged this morning after trading $0.50 higher overnight. The Sept/Oct front spread is threatening to make new lows. Product cracks are up a few ticks as crude softens. Product spreads are steady at lower levels. The curve is not messaging shortage.

Necrosis in equity indexes is so pervasive it’s the rule, not an exception in deference to the FOMC. When the pharisees do finally bring the tablets down from the mountain tomorrow at 2 Pm EDT, algos will consume the decision in milliseconds.

One of the things I learned from Pete Steidlmayer in the 80s was, “When markets and ranges compress they can’t trade because they have no new information to discount.” So far, a radically changing world has had zero effect on stock prices, not counting falling and rising 35%-ish in 3 months. What I mean is, if no one is trading these prices, how can I trust them?

Me… “Open the pod bay doors, Hal.”

Algo… “I’m sorry, JJ. I can’t do that.”

Same idea in bitcoin as S&Ps… algos need conditions to be “true” or they can’t trade.

my vibe

End the fed or make it a TV show? The debate today is not to cut or if it really matters. It’s whether or not to even have a fed at all. They know how the markets are positioned. Cutting rates would be literally crazy. So, I have to ask why foist all the drama when the only people who oppose a cut are the committee and its truclent Chair.

I cycle with friends and there is a saying when you’re riding in a pace line: “It is much harder to catch up than it is to keep up.”

The first yellow autumn leaves are falling from the tulip trees this morning.

kiss cam lol good thread …

have a relaxing day

JJ

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