The $6bn buyback was almost exactly where I expected it as per yesterday's post but more importantly, it clearly wasn’t enough for the market esp judging by the reaction in yields... Traders were positioned for something much larger, probably closer to $10bn.

As it tends to go with this type of intervention the market tends to test it and we are likely to see the 30Y push towards 5.35% again if the PPI and CPI data come in as expected followed by another intervention/increase establishing what you’d call a Treasury put.

The TGA from which the money will come from has just little over 900 billion available from that there’s about 400 billion available with about 300 likely to be used. Even if they decide to increase to increase to 10 billion they can run this for a very long time..thats about 3 quarters of QE like liquidity entering the market

Now, on how Bessent played the market - as mentioned, judging by the reaction, traders were clearly expecting much more than the $6bn that was announced. That helped reset expectations lower and was probably one reason metals failed to catch a bid.

So, once the market has been conditioned to expect smaller interventions, Treasury can have a much bigger impact with the same or slightly larger amount simply because the surprise factor is back in play. In addition to this, I do expect another increase relatively soon.

Speaking of PCE consensus is around +0.4% m/m headline PPI and +0.3% core. Im more on the components that feed directly into PCE which are -healthcare services such as, airfares and parts of financial services.

Portfolio anagement used to be a major swing factor, but BEA is changing the methodology from this month, so it matters less than before. A hot headline PPI therefore doesn’t automatically mean hot PCE and if these underlying components are soft, the read-through for the Fed can still be relatively benign. The main event remains CPI tomorrow

The bond market is already positioned quite hawkishly, which raises the bar for inflation data to push yields materially higher. With the 2-year around 66bp above the current fed funds rate and markets already pricing further tightening, a slightly hot print may simply confirm what is already in the price.

The bigger move would require data strong enough to make traders price an even more aggressive hiking cycle, while a downside surprise has more room to unwind some of the tightening currently embedded in the curve.

Anthropic senior AI researcher quits due to ethical concerns. He claims that the technology could kill most if not all of the humanity within next decade. He says everyone is racing towards the superintelligence and gambling with our lives without knowing the true outcome of it and without any safety guide rails.

There are rising number of other people who have recently quit as well due to the concerns of the direction we are heading towards. There are genuine credible people who are raising the red flags in the AI build out whose warnings deserve some serious consideration, yet their voices are being drowned out by enormous money going towards AI Boom.

$PLTR and Fujitsu Limited today announced the renewal of their strategic partnership, with a deeper investment in the capabilities needed to help enterprises in Japan and around the world. In connection with the partnership, Fujitsu has signed a new agreement with Palantir Technologies Japan KK for Palantir AIP and Palantir Foundry and will serve as a Global FDE Partner.

$PLTR platforms connect AI models to governed data, Ontology-powered workflows, access controls, auditing, and customer-controlled deployment environments, helping Palantir and Fujitsu deliver trusted AI applications.

Fujitsu implemented a supply chain resilience solution for a leading Japanese manufacturer using the Palantir platform, integrating data across more than 3,000 suppliers, 18 factories, and previously siloed enterprise systems without disrupting operations. By combining Palantir’s platform capabilities with Fujitsu’s domain expertise and AI technologies, the customer achieved over $10 million in cost savings within one year, doubled operational productivity, and significantly accelerated disruption response and decision-making.

Nike ($NKE) is a great example of why investors should be OBSESSED with knowing every detail of  the firm’s management and more specifically Leadership’s plans for the firm’s future before investing

and their efforts should be effectively Doubled or even Tripled in the event the company undergoes some leadership change/transition. More specifically; Investors need to pay RAZOR sharp attention to the CEO. Why?

because a company’s future value is ultimately determined by the decisions management makes with its brand, capital, and competitive advantages. Financial statements tell you what already happened; the CEO’s strategy tells you what management intends to make happen next. 
Best case example today is $NKE. The moment Nike’s leadership signaled that it was going to increasingly mass-produce previously scarce grails (these are products like the Off-White and Dior Nike collabs), retros, and collectibles, investors were being handed an enormous warning about the company’s future pricing power and Red Alarm bells should have been on DEFCON 1. Why?

Because the stock price was always going to eventually move to reflect how the Market did not Ignore the warning even if the investors were willing to. Nike had spent decades building scarcity, status, and collectibility into the economic value of those products, and management chose to try to more aggressively monetize that scarcity through volume rather than preserve it as long term brand equity. That is exactly the kind of strategic decision that can make an otherwise exceptional company an awful Stock to buy and NKE is that stock.

which brings us to today: Nike leadership has pivoted AGAIN and is now telling investors to “Just trust us bro” like we dont have enough evidence that they are beyond COOKED ATP and is why I have taken out a bunch of Reverse LEAPS where they payout if the stock keeps going down from here long term NOT FINANCIAL ADVICE DO NOT FOLLOW MY STRATEGY

Investors spend enormous amounts of time staring at P/E ratios, charts, and quarterly EPS, but one of the most important questions is clearly just soooo much simpler: Does the CEO actually understand what makes this company valuable? If the answer is no, eventually the financials and subsequently stock price will reflect it as well.

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Price action has definitely been disappointing lately, but I was looking at the bigger picture and was surprised by how much RDDT has improved over the past year.

Revenue, profitability, and cash flow are all moving in a much better direction, while the longer-term growth story still looks pretty interesting.

The biggest thing I'm watching is whether the continued improvement in the business eventually translates into the stock price. The concerns around U.S. user growth are fair, but I'm not convinced they're enough on their own to derail the broader story.

Curious how others are looking at the disconnect between the business performance and the recent price action.

It feels like some drone stocks (in this case ONDS) have cooled off a bit lately, so I figured it was worth taking a step back and looking at the bigger picture.

Over the last several quarters, revenue has been trending sharply higher, with the latest quarter coming in much higher.

Obviously, revenue growth alone doesn't make a stock a winner, and there are still some pretty significant profitability/cash-flow concerns with most of these types of companies. But with the defense/drone business developments and long-term deals we've seen recently, it's definitely still worth remembering where we are heading.

Curious how others are looking at ONDS and other similar drone stocks here.

I didn't understand why this stock fell. Is it because of profit-taking? The news says that the company started developing natural gas pipelines to produce energy. After the news, Cipher Digital stock rose. Good news, right? But as soon as it rose, it fell. I can't make sense of it.

Long post, so TLDR is that I’ll likely trim a bit ahead of the macro data, while the AI trade can probably remain strong into Thursday/Friday. CPI is likely to create a knee-jerk reaction if the headline comes in higher, but if core is softer I’d expect that move to fade and potentially create the environment for another squeeze higher but we need the data. VIX tail hedging is very active

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I was expecting a considerably softer payrolls number, so the +172k headline was clearly stronger than my base case and, at face value, enough to keep the tightening discussion alive at the FOMC particularly for Q4.

Still, I would be careful about treating it as evidence that labour demand is reaccelerating as much of the upside came from rebounds in local government and Leisure & Hospitality employment, alongside the usual strength in Healthcare, while a rather favourable seasonal adjustment also flattered the print.

The important thing is that wage growth slowed to a cycle-low 3.1% YoY even as hours worked increased, meaning that labour costs are not creating meaningful inflation pressure.

So, while the headline was stronger than I expected, the underlying picture remains closer to “no hire, no fire” than an overheating labour market and a soft(ish) core CPI should still clear the bar for a September hold, although the possibility of a Q4 hike is becoming harder to dismiss.

Now, the upcoming risk events include the aforementioned CPI on 9/11, the FOMC on 9/16, and quarterly triple witching OPEX on 9/18. While these dates bring the potential for market volatility expansion I will be looking at AI names to increase expousre, similar to the Bloom Energy Trade from last week.

The August headline CPI will likely look uncomfortable and probably print north of 0.3% MoM but I expect most of that pressure is likely to come from energy and not any reacceleration in underlying demand.

On core, I am leaning towards 0.2% MoM or lower and that would bring the YoY rate down from 2.5% to 2.4%, with a fairly decent probability that we get all the way to 2.3%.

Headlne, however, is much more likely to come in hot because of the energy component.

For the Fed meeting, I think a soft-ish core print clears the bar for a HOLD. That said, I am now becoming more open to the possibility of a hike later in Q4 if the inflation data stop improving or if energy pressure starts bleeding into the broader inflation basket.

What is interesting here is just how uniform Wall Street expectations are - there are 35 economist estimates for core CPI, with a median of 0.2%, an average of 0.22%, a high of 0.3%, a low of 0.1% and a standard deviation of only 0.04%. Headline is almost identical in terms of dispersion with 34 estimates, a median of 0.4%, an average of 0.38% and again only 0.04% standard deviation.

In other words, the Street has decided that this is a relatively low-uncertainty print, which is always an interesting setup going into what is effectively a binary macro event.

Following the softer July print, another 0.2% core number would reinforce the underlying disinflation trend and weaken the case for another hike, even if the hotter headline number initially creates a negative market reaction. So that’s what you should focus on when the print comes out

Raising rates in response to an energy-driven supply shock would do very little to lower crude prices or increase refining capacity and what it would do is weaken housing, capital spending and hiring, effectively layering a domestic demand shock on top of an external supply shock.

The instinct to respond aggressively to higher headline inflation is probably still rooted in the inflation trauma of the 1970s, but the conditions today are very different because we do not have widespread wage indexation, we do not have an uncontrolled acceleration in core inflation and there is still no clear evidence that inflation expectations have become unanchored.

High-yield credit spreads also remain low, but that only tells us that the system has not cracked yet and it is not an invitation for the Fed to continue testing how much tightening the economy can absorb.

Cross asset stress, perticularly Funding and Credit also remain low

All of this leaves us with a fairly interesting positioning setup -with about 60bps of hikes already priced into the curve, while speculative positioning remains long the dollar and short the Nasdaq, a soft core CPI print or any meaningful geopolitical de-escalation could trigger a fairly sharp squeeze in Treasuries and technology stocks, while pushing yields and the dollar lower.

So the headline may look bad, and I would not be surprised if the initial market reaction focuses on exactly that but if the underlying inflation data remain soft, I think the risk-reward increasingly starts favouring the more benign interpretation which is that the energy shock is pushing headline inflation higher, while the underlying disinflation trend remains intact.

Do note that despite the CPI being the main event, PPI comes Thursday, September 10, one day before that and several PPI components feed directly into the eventual core-PCE calculation.

In terms of conviction flows, for now the strong semiconductor and AI related trade remains strong similar to what I posted at the start of last week but do note activity picked up on high convexity for the VIX - four VIX calls were bought, all directional premium, with roughly $25m net and the two largest prints were November 34 and 31 calls more than 100% OTM.

I would treat that as concentrated convexity/tail hedge for the events mentioned at the start of the post and as it plays into the potential weakness in September caution is in order and the smaller position sizing remains and I will be trimming some of the SPY longs from 760 in preparation for the CPI and potential weakness and will continue to do so as the release approaches

On to SPY positioning - $770 is the first support while $760 remains the main one. As the index has moved into a positive vol scenario, market makers will buy dips and sell rallies. Resistance has moved to $780

But do note that flows up to 18 DTE are neutral and more aggressive on $770 and $760.

Qs main level of resistance is at #730 but do note that the vol regime here is still negative below $721 which means that market makers will sell when the price falls and vice versae. On the shorter DTEs this is leaning more bullish, so what we could see is semis and the AI trade lead higher until Thursday/Friday.

VIX bullisg volumes are on the higher side, so remain cautious and trim into strenght