Ryan retweeted
Trimmed Mean PCE Inflation showing signs of re-acceleration and broadening out in the September print.
What the data shows
Above 3%: 52.6% of the basket in September, up from 29.5% in August. That’s the second-highest reading in 13 months, after May at 55.2%. But this series alternates: 31.5% in June, 49.9% in July, 29.5% in August, 52.6% in September. On a 3-month average it’s 44.0%, against 44.9% in the prior three months and 41.7% for the past year. It’s an elevated plateau, not a clear acceleration.
The cleaner signal is what’s near target. Only 6.3% of the basket rose at 0 to 2%, the lowest in the series, down from 35.5% a year ago. The whole 0 to 3% band is 21.8%, against 48.1% a year ago. The distribution is splitting: a quarter of the basket is falling (led by prescription drugs at -14%) and half is running above 3%. Very little is sitting near 2%. That’s what sticky inflation looks like underneath.
Trimmed mean: 1m annualized trimmed mean PCE rises from 2% last month to 2.8% this month
Bonds are rallying today on back of concerns about the AI credit stress doing the Fed's job for them because clearly, they arent looking to do it on their own.
Ryan retweeted
$ORCL be like “we won’t need to raise as much capital as you thought because our near term CapEx cash outlays will be half what you thought due to a combination of vendor financing, customer prepayments, and BYOH.”
The KeyBanc analyst be like “what’s the mix?” Good ass question btw!
ORCL skated right around it, which means it’s probably the least favorable interpretation: almost entirely lender finance. $NVDA $DELL
The financing needs aren’t going away, the supply just keeps getting more circular and terms more opaque.
$ORCL threw this investor day together in a desperate attempt to stop the bleeding on their stocks and bonds.
And a company with two CEOs issuing FCF guidance for CY2029 is objectively hilarious
$NVDA is a short. $ORCL is a short.
“I worry that markets will be dealing with even more uncertainty than they already were with a Fed that doesn’t seem committed to its own strong statements.” Liz Thomas
🔥 Hot off the press: My take on today's Fed statement ⬇️ sofi.com/article/investment-…
“Does that mean that the current level of the Fed Funds rate might be the right one?”
“Well….ummm…. We’ve got to determine the appropriate protocol.”
😂
Ryan retweeted
“While overall financial conditions are tightening, I am unwilling and unable to call them tight.”
Quote of the meeting so far for me.
Ryan retweeted
Regional Fed manufacturing and services surveys show price pressures may have eased a touch, but they remain elevated. A small victory, though these levels still suggest higher inflation in the coming months.
Ryan retweeted
Corporate America be like:
“Congratulations on celebrating 4 years with *company name*
Click below to visit our Firmwide Employee Recognition Portal and claim your complimentary company-branded merchandise gift.”
*Clicks below*
“Our records indicate that you have failed a recent company-administered phishing simulation.
In accordance with the Company’s Information Security Policy, you are required to complete the mandatory Phishing Awareness and Remediation Training by Friday, October 30th.”
Ryan retweeted
Lately, the 10Y is *seemingly* being driven by AI CapEx expectations. SOXX is the proxy.
87% correlation over training 9-weeks. P-value = 0.003.
The deepest and most liquid market in the World is *seemingly* confirming what the equities are screaming. CapEx will fall short of prior expectations.
Correlation ≠ Causation
Ryan retweeted
Don’t overthink it. Hyperscaler and AI CapEx stocks are dumping because the assumption that there will be unlimited cheap debt to fund the AI buildout is proving false.
Only two ways around it:
1) Cut the CapEx
2) Fund it with equity
And both result in lower EPS.
Welcome to your first commodity cycle, Muse bros.
Ryan retweeted
counterpoint.
$gs is wildly expensive despite having a fairly cheap multiple because it's enjoying cyclically high equities revenue?
Ryan retweeted
Home BancShares$HOMB in active M&A talks, expects to resolve nonperforming C&I loan | S&P Global Market Intelligence spglobal.com/market-intellig…
Ryan retweeted
Analyst: "What's driving NIM compression?"
Bank: “Competition”
Analyst: "From whom?"
Bank: "Our own CD special”
Ryan retweeted
I grew up in bonds.
It boggles my mind how little even smart finance people (ostensibly the author not ZH) know about convexity.
Buying MbS funds is literally one of the dumbest things. You have capped your rates down upside by selling calls to borrowers for a few bps yield
Think Rates Are Peaking? Consider Mortgage-Backed Securities zerohedge.com/markets/think-…
