US Treasuries remain heavy, but it’s not all about the US this time. The Euro curve remains under steepening pressure. Without a catalyst to reassess the ECB path, the front-end will remain anchored, while the back-end plays out inflation concerns and supply pressures. Gilt yields also continue to rise sharply. But a quieter US on Thursday might just calm things for a bit.Image Source:  US Treasuries remain under pressure, but at least the 30yr saw some buying Market rates have shot higher as a theme for early 2025, and while the move has been bolstered by higher Treasury yields, there’s been independent rises in the likes of Euro market rates and gilt yields. Issues spanning sticky inflation and high deficits abound, as do Trump administration tax cutting and tariff raising policies. Actual effects remain opaque, but the path remains higher until or unless the underlying narratives change.Wednesday’s US 30yr auction was a much tidier affair compared with the 3yr and 10yr earlier this week. The 30yr came c.1bp through “secondary” – the inverse of tails seen on the 3yr and 10yr auctions. We had a suspicion this might happen. We saw a frantic move higher in yields for no good new reason. In contrast to Tuesday when at least we had some data that was supportive of higher yields on the day. In any case it’s a small relief for bonds for a change – at least there are some buyers out there that have spotted some semblance of value. […]

The Dow rallied in the last hour of trading after  at midday, scoring a 106-point gain. The S&P 500 scored a small pop, while the Nasdaq settled slightly below breakeven. Investors unpacked the Federal Reserve’s December meeting minutes, which revealed concerns about how President-elect Donald Trump’s proposed tariff and tax plans could cause inflation to spike.In response, the 10-year Treasury yield continued to climb, briefly topping 4.7% — levels not seen since late April. Meanwhile, the reversed earlier gains to close the session in negative territory.Crude Inventories Rise for 7th-Straight WeekOil futures tumbled Wednesday following a report from the U.S. Energy Information Administration (EIA), which showed commercial crude inventories fell for a seventh consecutive week. Meanwhile, stockpiles of gasoline and distillate rose considerably. February-dated West Texas Intermediate (WTI) crude lost 93 cents, or 1.3%, to settle $73.32 per barrel.Gold prices nearly hit a four-week high on the back of today’s weaker-than-expected ADP employment report. Gold for January delivery gained 0.4%, to settle at $2,676.90 an ounce.

Image source:  European banks are not acting like either inflation is breaking back out or that the economy is going to be fine and hit its widely-expected soft landing. Instead, what they are doing is the other side of the weak euro. Both are further corroborated by the latest from France and especially Switzerland, with another warning coming from the Swiss on more than “inflation”.Video Length: 00:19:34

Image Source:  As we leave 2024 behind, we anticipate increased uncertainty as the world shifts gears. The expectation is that we will continue to see a rise in geo-political tensions, debt, supply chain warfare, trade and tariff battles, over-stretched banks, companies and consumers being pushed to the brink, and real assets finding their footing as safe-haven and inflation-containing.With all of the challenges, there are opportunities.One of my favorite things to do is ‘wave-jump’ into the Ocean. What does that mean? It is quite literally jumping into an incoming wave, and then moving with it toward shore. The key is to not fight the Ocean. Instead, I choose to jump right in. That means flowing with the wave and awaiting the next one that will inevitably come. The waters can be choppy one minute and smooth the next. Nothing can be timed perfectly.All of that is okay if your philosophy is one of patience. That’s especially true with investing.Over this month and throughout the course of the year, we’re going to delve into geo-politics, the economy, and finance in an effort to explore how they impacts you, your long-term investments and the world around us. Our goal is to unpack what’s unfolding in areas like commodities, the U.S. dollar, the Federal Reserve, Wall Street, Energy, Artificial Intelligence and much more.Below are the top five commodity trends we’ll be following in 2025. Uranium and Nuclear Energy Remains Bullish After reaching a 17-year high of $106 in February, uranium prices drifted downward to […]

Image Source:  We have our first payrolls report of 2025 on Friday. Technically, it’s the last report of 2024, but that’s just bookkeeping. Normally I’d write a piece like this on the Thursday before the announcement, but with US markets closed tomorrow for former President Carter’s funeral, today is the last day to act prior to the report.The current consensus estimates are for an increase of 165,000 Nonfarm Payrolls, down from 227k; an unchanged Unemployment Rate of 4.2%; and Average Hourly Earnings dipping to 0.3% from November’s 0.4%. ForecastEx markets are a bit more optimistic about payrolls, with  that the increase will be above 180k, though  around 4.2%.Options traders, however, seem to be a bit more cautious about the market’s potential reaction to those numbers.That’s not surprising, considering that we had two moves of greater than 1% – one up, one down – in three of the prior sessions.Traders are not necessarily skittish, but we see S&P 500 Index () options pricing in more volatility than usual ahead of the number. That said, it’s not as though options traders are outright bearish, as the IBKR Probability Lab shows for SPX options expiring Friday.The peak probability is for a move to 5935, about 0.75% above the current index level.There has been a persistent bullish bias priced into short-term options, especially considering the market’s recent propensity for  over those to the downside, especially on Fridays ().This week is no exception: IBKR Probability Lab for SPX Options Expiring January 10th, 2025 (Click on image to enlarge)Source: Interactive […]

A recent article about a liquified natural gas (LNG) ship caught my attention and made me think about investments that take advantage of this one ship’s dilemma.Recently, Bloomberg reported that a sanctioned Russian LNG carrier ship almost circumnavigated the world looking for a buyer for the LNG on board. The ship was at sea for four months, covering most of the world’s oceans, and eventually had to stop at a Russian floating storage depot. Here is the vessel’s route: The LNG came from Russia’s new Arctic LNG 2 facility. The article noted that “several shipments have been exported from Arctic LNG 2, Russia’s newest facility, all have used dark fleet vessels, and none have docked at a foreign port, as potential buyers fear retaliation from the US.” Because there are no willing buyers for Russia’s LNG, the Arctic 2 facility was forced to stop production.LNG is being used globally as a source of clean energy, and production in North America is expected to double by 2028.(Click on image to enlarge) With Russia’s LNG currently unavailable to the global markets, the next few years should be good for U.S. companies already producing and shipping LNG. Here are a couple of stocks to consider.Cheniere Energy () is the leading producer of LNG in the U.S. LNG has a $48 billion market cap, with plenty of growth ahead. The most recent dividend payout was in November at $0.50 per share.Total Energies () has assembled a leading global LNG business. It claims to be the leading exporter of […]