Short-lived Rally

MARKET UPDATE

Global fixed income and equity markets rallied yesterday on UK intervention

• Strong, broad rally

• Short-lived?

• BOE's move doesn't address fundamental challenges

• Euro stocks pared gains

• Bonds creeping higher

Cracks in housing

• Avg 30Y mortgage 6.52%

• How much home will $2500 get you?

Source: @M_McDonough

• No wonder mortgage apps are down and purchase index down 29% from same time last year

• Pending home sales down

  • 80% of pending sales become existing sales in 2 months

  • Slowdown in existing sales ahead

Source: RSM

Big jobs numbers

• Initial jobless claims 193k vs 215k expected

• Labor market remains strong, no signs of real weakness

Crude   $82

• OPEC+ meets next week (Oct 5)

• $90 a barrel appears to be price target

• Production cuts ahead?

Source: LPL Reserach

Nord Stream update

• 4th leak discovered

• Gas still bubbling to surface

• Location of exact leaks still unknown

• Sabotage still suspected

Apple AAPL

• BofA dowgrade to netural from buy

• One of only 4 stocks that didn't participate in yesterday's rally (others: QCOM -2.43%↓ ALGN -1.47%↓ EXC -2.57%↓):

Retail capitulation?

• Retail sold net $2.9 billion past week

• Second largest outflows since March 2020

• Bulk of outflows from single stocks

Source: JPMorgan Retail Radar

Earnings

• Bed Bath & Beyond BBBY

• Rite-Aid RAD

• CarMax KMX

• Worthington Industries WOR

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CRYPTO UPDATE

Bitcoin has been outperforming over the past week

Source: Daily Shot

Potential regulations catalysts

• Commodity Futures Trading Commission (CFTC) chairman Rostin Behnam thinks regulation will boost crypto:

“a massive opportunity for institutional inflows that will only occur if there’s a regulatory structure.”

• Behnam supports legislation that would make CFTC overseer of crypto industry

• If traded in CFTC-regulated market, said Bitcoin could “double in price”

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