I am not sure the S&P PMI is a game changer. NVDA tonight is hotly anticipated. Silver and gold are breaking out.
Taking a shot at short USD here. It’s interesting to me how China is trying creative destruction right as the US just embarked on a massive central planning, government spending strategy. Interesting times.
I am shifting to neutral on equities here after a decent run lower since my bearish outlook published July 27.
This makes it easier to be bearish USD because: SPX down, DXY down is hardly a thing in recent years. See charts inside.
Today I offer takeaways from Camp Kotok in Maine, plus my view on what it might look like if the bond vigilantes have a revival in the US.
The path of least resistance is a higher USD in the short term. This does not mean I am short USD—it just means I think risk/reward is poor on long USD.
The Fitch downgrade is irrelevant, but it does serve as a reminder of the current unhinged state of US fiscal policy. Also oil looks ready for a new, higher equilibrium.
I think the range of outcomes for ISM today is something like 46 to 49. It skews heavily toward a strong number.
Tonight’s RBA meeting is more interesting than usual. Yields might be set to break to the upside and encourage USD seasonality.
It’s hard being long the dollar, but I’m sticking with my current trades through the month-end weirdness.
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