US indices struggled overnight under the weight of uncertainty from both the looming NVIDIA (NVDA US) result and Jackson Hole i.e. has the surge by tech and AI stocks been justified and are the major central banks going to remain hawkish through the 2H, we believe the answer to the 2nd point is likely to be yes, if only in rhetoric, as they don’t want to let the inflation genie back out of the lamp after working so hard to capture it!
- We believe stocks are now looking for a low before an assault on their 2023 high.
MM is neutral/bullish toward US stocks short-term
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The US 10-years have been trading around 15 year highs over the last week which we believe is starting to unsettle stocks who keep getting optimistic that an interest rate pivot has been reached and cuts will follow next – our opinion is the latter is likely to prove overly optimistic.
- Jackosn Hole is likely to be a volatile event that could easily propel US 10’s toward 4.5% but we don’t expect meaningful follow-through.
MM remains bearish toward bond yields medium term
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