This past week in the US stock market saw significant volatility due to a busy schedule of earnings reports and economic data releases Major indexes generally trended lower with T Rowe Price traders describing the week as exceptionally active on both economic macro and earnings micro fronts Early in the week the Nasdaq Composite and S&P MidCap ...

Job Growth Disappoints with Public Sector Gains as Private Jobs Fall  Only 12,000 jobs were created this month, and all were in the public sector, with private payrolls dropping by 28,000. This brings up questions about the role that hurricanes might have played in these numbers. Admittedly, this falls outside my expertise on non-farm payrolls...

October Payrolls Report Nears Negative Territory, Reveals Job Market Strain  We anticipated that the October jobs report could very well mark the first negative print since 2020. Moments ago, the Bureau of Labor Statistics (BLS) released the much-awaited data, and we came close to that prediction: the October payrolls figure posted a surprisin...

U.S. Treasury Plans Record Debt Issuance Amid Fiscal Pressures  Earlier this week, on Monday, the U.S. Treasury released its estimates on debt sources and uses for the upcoming quarter. The report indicated that, while the Treasury expects borrowing needs to be slightly less in the fourth quarter of this year, there will be a substantial incre...

Strong Demand in Treasury's 7-Year Auction Soothes Market Concerns  After two challenging auctions kicked off the week, the Treasury completed its shortened issuance schedule today with a successful sale of $44 billion in 7-year notes. This auction was notable for its strong performance, delivering a high yield of 4.215%, which is up significa...

Treasury Market Faces Dual Threat from Rising Volatility and Liquidity Risks  The Treasury market currently faces a dual threat from rising yield volatility and congested primary-dealer balance sheets, creating a challenging environment for liquidity. Yield volatility, in particular, is a significant factor as it directly impacts liquidity. Wh...

This week in the U.S. stock market, the S&P 500 saw its recent six-week streak of gains come to an end, pressured by rising U.S. Treasury yields. As Treasury market futures indicate a potential flattening of the Federal Reserve's rate-cutting trajectory, equities appeared to respond accordingly. Large-cap stocks showed more resilience compared ...

Market's Cautious Approach to Trump Win Amid Shifts in Polling Trends  The recent shift in polling toward President Trump has sparked more conversations around so-called "Trump trades" emerging in financial markets. But how much of a Trump win is the actual market pricing in—beyond what online betting markets might suggest?To address this ques...

Treasury Market Liquidity Faces Risks Amid Yield Volatility, Inflation  Liquidity in the Treasury market is poised to worsen due to a combination of self-reinforcing factors. As the U.S. election nears, yield volatility is expected to rise, exacerbating liquidity pressures on already constrained dealer balance sheets. Further down the line, in...

Japan's Negative Rates: The Hidden Threat to US Tech Stock Valuations  As the US stock market continues to reach new highs, it's natural for investors to speculate about where the greatest risk to this bull market might come from. However, many are focused on the wrong potential threats. The biggest risk to the bull market isn't from a US rece...

Treasury Auction Disappoints as Yields Surge Amid Market Selloff  On a day when stocks are plunging, driven by the sudden recognition of rising yields, expectations were high for today's reopening of the 20-year Treasury auction, specifically for the 19-year, 10-month Cusip UD8. However, the auction didn't live up to those expectations. The hi...

Fed's Emergency Rate Cut Backfires as Treasury Yields Surge, Election Looms  When the Federal Reserve decided to cut interest rates by an emergency 50 basis points on September 18, all the while claiming that the U.S. economy was still "good," I couldn't help but question their decision-making process. Just over a month later, both the 2-year ...

Goldman Sachs Traders Assess Election Market Strategies and Volatility  With the upcoming election, the Goldman Sachs trading desk has observed that clients are beginning to position themselves for various potential outcomes, particularly leveraging the optionality that arises from the binary nature of the election result. Recently, it has bec...

Global Markets Weekly Wrap KW 42 : S&P 500 Gains Led by Utilities, Nasdaq Surges on Tech Earnings Rally  This week, the S&P 500 Index saw solid gains, led by strong performances in the utilities and real estate sectors. Meanwhile, energy stocks saw a dip as oil prices retreated, largely due to decreased concerns over potential Israeli ...

ECB Cuts Rate to 3.25%, Signals Growth Concerns as US Data Surges  Yesterday, the European Central Bank (ECB) made an expected move by cutting its deposit facility rate to 3.25%. This decision didn't come as a surprise, as the market had already priced in this outcome through OIS futures. All 65 analysts surveyed by Bloomberg, including our ow...

ECB Cuts Rates Again to Support Slowing Economy and Combat Inflation  In a move widely anticipated by economists, the European Central Bank (ECB) has once again reduced its three main interest rates by 25 basis points during its latest meeting. This marks the second consecutive rate cut by the ECB, an effort designed to counterbalance the rapi...

Market Shifts: Earnings Volatility, AI Hype, and Financial Evolution  Bobby Molavi, a macro trader and managing director at Goldman Sachs, opens with "Game on" in his latest reflections on the macroeconomic landscape, market trends, and microeconomic developments. As of last week, the S&P 500 had just reached its 45th all-time high, signal...

Understanding the VIX and Volatility Indicators Amid Market Uncertainty  The financial media often discusses the daily movements of the VIX, or implied volatility index, and what it reveals about investor sentiment. While this index is frequently mentioned, many investors do not fully grasp what implied volatility truly represents. The purpose...

Q3 Earnings Growth Reliant on 7 Mega-Cap Firms, Recession Risk Persists  Yesterday, while reviewing the Q3 earnings season outlook, something notable emerged: Bank of America reported that overall Q3 earnings were expected to grow by a modest 4%, entirely driven by a 19% rise in the earnings of the "Mag 7" companies. This marks a drop from 37%...

Fed Repo Market Turmoil Sparks Fears of Another Liquidity Crisis  In early October, concerns arose regarding the Federal Reserve's repo rate corridor, a critical component of the U.S. financial system, as it showed signs of breaking down. General Collateral rates, which help anchor the entire system, surged well above the reverse repo rate. Th...