Thread by @MacroTechnicals

back at the desk and THIS ?? Chicago PMI (bit more volatile than ISM) but what a miss vs expectations!

FOMC members see those numbers too.

YoY momentum -19.7 is 3rd largest after -23.7 Dec2008 and -20.9 Mar2001 💥

when in Mar2001 Chicago PMI hits -20.9 YoY, SPX rolled over long time ago and was -30% off peak.

in Dec2008 when PMI was -23.7 YoY, SPX of course in a total mess -50% after LEH.

Now, PMI -19.7 YoY and SPX near ATH.
2 worlds: a complete different Business vs Market confidence

when in Mar2001 Chicago PMI hits -20.9 YoY, US10Y rolled over long time ago and was -200bp off peak.

in Dec2008 when PMI was -23.7 YoY, US10Y was -325bp off peak.

Now, PMI -19.7 YoY and US10Y is -120bp off recent peak. THIS at least makes sense

after the long flattening theme, it is the RE-steepening theme which should really make more headlines.

here some samples 2s30s 5s30s 2s10s and 5s10s vs SPX ...

today's FOMC rate cut will let the curve steepen further.

$VIX

the global business outlook is so bad, German 30Y BUXL is now 209.30 or 0.12% 😳

imagine... FOMC decides " what the heck, let's cut 100bp back to 1.25%-1.50% and keep it there for a foreseeable time so everyone can just STFU "

FOMC & Powell:

• do nothing = "so behind the curve!" , blame

• cut 25bp = "do they not see the global outlook?" , blame

• cut 50bp = "oh, more than expected, that bad? " , blame for being late

post GFC trader/portfolio manager will have witnessed:

• 2 US presidents
• 3 FED chairs
• rate hike cycle + rate cut
• steep, flat, inverted yieldcurves
• rising business confidence cycles
• VIX spikes
• 2 Global slowdowns
• BREXIT
...
and not one real stock bear market

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