U.S. Futures & World Markets

Stocks are set to open lower this morning after yesterday's relief rally. On Wednesday (pre-market), Treasury Secretary Bessent announced that he would double buybacks of long-term Treasury bonds, promptly sending yields lower and helping push risk assets higher. Now the market is trying to determine if this ends the run in rates higher, or if it's a temporary measure.

Bitcoin is extending its recent rally and trades at its highest level since early June. Here is @bluekurtic on Bitcoin technicals: "Bitcoin is finally above its 200-DMA after more than a year. Only the 3rd time BTC has spent 6+ months below it. In prior 2 cases, it never again fell below the signal price over the next year."

Bessent calmed rate fears for the time being, but rates are already higher than they were before his announcement, so the bond market hasn't exactly declared victory yet. The key question for the week: Warsh speaks at Jackson Hole. BofA survey says 53% expect a neutral tone. That may be the most important market event of August.

S&P Futures vs. Fair Value: -34.00  |  10-Year Yield: 4.70%

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Charts & Data

Semis saw a sharp bounce-back rally from end of July through Monday, but stalled right at the 50-day moving average. SOXX is down more than 7% since Monday's close. Bespoke: a technically significant rejection at a key resistance level.

Biotech ETF (IBB) jumped right back to new all-time highs, up nearly 5% as the group benefits from Moderna's 100%+ move. Bespoke: healthcare continues to be the quiet rotation trade of the summer.

Bessent doubled Treasury long-bond buybacks — 30-year yields fell sharply on the news. But rates are already back above pre-announcement levels. Bloomberg via Daily Chartbook: a temporary reprieve from the bond vigilantes, not a decisive victory.

72% of fund managers say no Fed hike before US midterms. Warsh at Jackson Hole: 31% expect hawkish, 7% dovish, 53% neutral. BofA via Daily Chartbook: the market is positioned for a neutral Warsh — any surprise either way moves markets.

Credit card debt is DOWN 1.1% YTD and disposable income is up 2.4%. Credit card debt as a % of disposable income is only 5.3%, well below the 6.4% average from 2003-2019. Ryan Detrick: the consumer balance sheet is healthier than the headlines suggest.

Every sector except Utilities has seen at least a 75% gap between its best- and worst-performing stock YTD, while the average S&P 500 constituent remains ~15% below its 52-week high. Raymond James via Daily Chartbook: the headline index masks extraordinary dispersion underneath the surface.

Gold at $4,390 / Silver at $63.42 — gold/silver ratio exactly at its longer-run average of 69x. Gold is the macro hedge; silver is the industrial growth play. Nick Colas, DataTrek Research: a useful framework for choosing between the two metals at current prices.

$500M worth of Bitcoin shorts were liquidated within minutes as BTC spiked to over $69K — a classic short squeeze. Glassnode via Daily Chartbook: the market was predominantly short into this move up, amplifying the rally.

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