🟪 Friday GOAT Charts

Markets did their best to act responsibly this week: 10-year Treasury yields got as high as 4.2%, a reluctant acknowledgment that the Fed is likely to keep rates higher for longer.

"Be fearful when others are greedy, and greedy when others are fearful."   — Warren Buffett Friday GOAT Charts   Markets did their best to act responsibly this week: 10-year Treasury yields got as high as 4.2%, a reluctant acknowledgment that the Fed is likely to keep rates higher for longer.   Stocks were dutifully lower.   The moves were small, so not much changed on the surface, but don't be fooled: Things are getting bubbly underneath.   SPACs may be poised for a comeback, with VinFast, a Vietnamese maker of electric vehicles, set to close on one of the largest-ever SPAC mergers.   We have a new AI champion in Symbiotic, which traded up 50% on Monday after reporting huge demand for their robotic AI warehouse workers.  And we have new meme stocks, too, with Tupperware and Yellow both rallying despite being at the precipice of bankruptcy.   But the most zeitgeist-y deal was made yesterday by the cloud provider CoreWeave, which borrowed $2.3 billion from institutional lenders who were happy to accept Nvidia GPUs as collateral.   CoreWeave will use the borrowed money to buy more Nvidia GPUs.   If that makes you want to sell your house and plow all the proceeds into Nasdaq puts, I understand — but I wouldn't recommend it.   Because this morning's jobs data suggests that, in the US at least, things are really good: So good that Bloomberg columnist Conor Sen thinks we may soon experience the best economy in US history.   So, in addition to the GOAT footballer scoring goals in Miami and the GOAT ticket seller extending her tour into 2024, we may now have the GOAT economy to look forward to.   Will we get the GOAT stock market, too?   I wouldn't count on it: The best market rallies are when things go from terrible to not-so-bad, not when they go from good to great.   And if we do get to great, you'll want to start thinking about being fearful, per the GOAT investor.   Fortunately, we're only at good right now, so I think we've got time to enjoy Messi, Swift, and the US economy.   Let's see if the charts can tell us for how long.   GOAT jobs report? The US added a perfectly Goldilocks 187,000 non-farm payrolls in July — we seem to be decelerating into a not-too-cold, not-too-hot sweet spot of sustainable growth.   GOAT job market? At 3.5%, the US unemployment rate remains near 50-year lows, which is creating new opportunities for people to join the labor force: The employment rate for those with a disability is up to a record 22.9%.   The gains are real: Wage growth (blue line) was unchanged at 4.4% in July, a full 1.4 percentage points above headline CPI (red line). That won't pay for a ticket to The Eras Tour, but still, nice to have.   Can it get any better? It can: Per this chart from @bencasselman, US jobs are still below the pre-pandemic trend. That might give the Fed scope to pause rate hikes despite 3.5% unemployment.   They might soon want to pause, regardless: The Fed's "remittances due to the US Treasury" is generally a positive number. But paying 5% on bank reserves while receiving 2% on their giant bond portfolio has put the Fed into an $85 billion hole. Not a real problem when you own a money printer, but maybe a political problem at some point?   Less-good news is coming: Just when Fed rate hikes seemed to finally be having an effect, inflation is set to tick back up: From 3% in June, the Cleveland Fed's InflationNow model sees headline CPI rising to 3.42% in July and 3.89% in August.    Pushing on a string: Why are the lags so long this time? Fed rate hikes may be less effective than they used to be, because US consumers have far less variable-rate debt than they used to have.   Getting greedy? Trading in options on the Nasdaq 100 ETF (QQQ) continues to climb, with a record 4.7 million contracts trading on Tuesday of this week alone.   Makes me think some people are starting to get a little greedy.   But not so much that the rest of us should be fearful.   Have a great weekend, GOAT newsletter readers. – Byron Gilliam New Speaker Announcement Sandy Peng | Scroll Co-Founder   Join us to learn about L1 vs L2 scaling solutions, ethereum's scaling strategy and Zk rollups vs Optimistic rollups.  Tickets This issue is brought to you by Meet the all-new Kraken Pro—the powerful, customizable, beautiful way to trade crypto. Packed with new trading and analytics tools, a polished UI and fully-customizable trading interface, it's our most powerful and flexible trading platform—ever.   Sign up in minutes and start trading like a pro.    Not investment advice. Some crypto products and markets are unregulated. 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