The Fed Held at 4%, 2 Voted to Hike, and the 30-Year Rose 7bp Anyway

The Fed Held at 4%, 2 Voted to Hike, and the 30-Year Rose 7bp Anyway The 2-year fell 3 basis points to 4.67% after the press conference, Alphabet’s results sent Nasdaq futures 1.3% lower overnight, and GDP and PCE land at 12:30 UTC

The Federal Reserve held its target range at 3.75 to 4.00% at 18:00 UTC on Wednesday. The vote was 10-2; Lisa Cook and Beth Hammack wanted a quarter-point hike and said so in the statement. The bond market had held its own meeting. The 2-year closed 4.67%, down 3 basis points. The 30-year closed 5.37%, up 7; the 10-year 5.05%, up 6; the 20-year 5.41%, up 7 and the top of the curve for a 34th consecutive session. 2s30s went from 60 basis points to 70 on a day the policy rate went nowhere. On the 10-year’s path, shape only, most of the long end’s rise was in before 18:00 UTC; no 30-year path is held.

Memo. From: the long end. To: the committee. Re: your hold. Noted.

One receipt, this book’s own. Yesterday’s Macro Edge wrote down a test before the statement: if the market had read it correctly, the MOVE index would close below Tuesday’s 97.88 and the 2-year within 5 basis points of 4.70%. The MOVE closed 94.55, its lowest close since 22 September; the 2-year 4.67%. Both legs landed. The market had read the statement. The long end’s 7 basis points was not what the test was measuring.

Now the clock, with the search attached. Routes read: the Fed’s statement, the Dow Jones and Mace News flashes, the Treasury’s curve, the 5-minute paths of the S&P 500, the Nasdaq 100 and the 2-year. Stamps found: statement 18:00 UTC, press conference 18:30 UTC. Test run: 72% of the S&P 500’s 0.28% day was in before 18:00, and the statement bar moved the 2-year 1 basis point and the index four points the wrong way. The 18:30 to 18:45 bars moved the 2-year 7 basis points, and 67% of the Nasdaq 100’s day came after 18:30. The statement is refused as a cause, and 72% of the move has no named cause. The press conference gets its own heading below.

The index closed 7,743.98, up 0.28%, on a day 1,481 New York listings fell against 1,189 risers. A green index on a red tape, and the count is of every New York listing, not of the index. Both fear gauges fell again: VIX 16.91, MOVE 94.55.

Speculation, labelled as such. The 2-year fell 7 basis points in the 15 minutes after the chair began taking questions, and two-thirds of the Nasdaq 100’s day arrived after 18:30 UTC. On the majority test the press conference passes: it is stamped before the majority of both moves. It is not a measurement. A press conference can be timed and cannot be weighed, so it is printed as a sequence. Nothing in this block is a retrieved cause.

Then, at 20:02 UTC, Alphabet. Revenue 127.58 billion dollars, diluted earnings 2.12; shares 8% lower on a relay by 20:27 UTC; capital spending 51.4 billion per the CFO at 20:58 UTC; 11% lower on a relay by 22:22 UTC. Microsoft two minutes later: revenue 92.3 billion, Azure up 48%, capital spending 45.2 billion and more than 50 billion guided next, shares 2 to 5% higher on relays. ServiceNow 15% lower, Fortinet 25% lower, same relays. December WTI settled 102.78, up 2.88%, its high of 103.55 printed at 16:50 UTC, two hours before a wire about a possible campaign against Iran; the wire post-dates the high and is not named. The EIA’s 1.89 million barrel draw landed at 14:30 UTC with the barrel already at 102.39, 86% of the rise in; not named. The overnight Iran diplomacy wires, 22:13 UTC onward, post-date the contract’s 22:00 UTC reopen under the settle; not named. The barrel’s 2.88% has no named cause.

Things the committee raised on Wednesday: nothing. Things that rose anyway: the 30-year, the 20-year, the 10-year, December WTI.

The One That Mattered

The one number is a pair: the 2-year fell 3 basis points and the 30-year rose 7 on the day the Federal Reserve held, with two of its members on record for a hike. The textbook has a hawkish split lifting the front end and a hold leaving the back end alone. The tape did the reverse: the front end went down after the questions started, and the long end, which no vote touched, finished 7 higher. This book holds no cause for the 7 and says so. It holds the Weathervane, which has said for weeks that the price of long money is set outside that room, and on Wednesday the room agreed to nothing and the price went up.

Why did the 30-year rise 7 basis points on the afternoon the Fed declined to raise anything? We went down the rabbit hole in today’s Macro Edge. https://antivestor.com/macro-edge

Overnight Excitement

Nasdaq Futures 1.27% Lower, and the Cause Arrived 2 Hours Before the Contract Opened

December Nasdaq futures read 29,599.25 on the 07:45 to 07:50 UTC capture bar, 1.27% below Wednesday’s 29,979.50 settlement: over the 1.0% line where this section fires, 0.23 points short of the 1.5% line where it would lead. On the 08:45 UTC bar, 29,596.50.

The clock is unusually kind. Alphabet’s result was on the wire at 20:02 UTC and Globex did not reopen until 22:00 UTC. The contract’s overnight high, 29,794.25, is already 0.62% under the settlement, so the cause precedes 100% of the move; it read 29,673.25 at 00:00 UTC, 29,584.25 at 02:00 and 29,575.25 at 04:00; the low, 29,482.50, carries no bar time. It cannot be weighed here: no index weights are held, so Alphabet’s share of the 1.27% is not stated.

It is one index’s problem: December S&P futures 7,751.50, down 0.41% and inside the band; December Dow futures up 0.29%; December Russell futures up 0.39%. Tokyo closed higher and Seoul lower on syndicated reports, no levels printed; the Seoul wrap is stamped 06:50 UTC.

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Stock Market Edge

The Fed Did Nothing to the Policy Rate and the 20-Year Spent a 34th Session on Top A 10-2 hold, 8 tenors down and 5 up, and a Nasdaq contract that read the results before it opened

Premarket snapshot:

On the 07:45 to 07:50 UTC capture bar, read twice on all four December contracts and byte-identical, S&P futures were 7,751.50, 0.41% below Wednesday’s 7,783.25 settlement; Nasdaq futures 29,599.25, down 1.27%; Dow futures 52,851, up 0.29%; Russell futures 2,850.60, up 0.39%. The S&P contract ran 7,740 to 7,773.75 since the Wednesday reopen; the Nasdaq contract 29,482.50 to 29,794.25. Re-quoted at 08:45 UTC: S&P 7,750.75, Nasdaq 29,596.50. The VIX read 17.22 on the 08:35 UTC bar, provisional, against a 16.91 close. The Dow and the Russell slept through it.

Sector rotation:

Six of eleven sector proxies rose on a day the S&P 500 rose 0.28% to 7,743.98: technology 0.80%, financials 0.45%, energy 0.35%, industrials 0.34%, health care 0.30%, materials 0.15%; utilities 0.84% lower, real estate 0.73%, communication services 0.42%, staples 0.36%, discretionary 0.10%. Spread 1.64. The semiconductor funds rose 2.13% and 1.74%, 0.39 points apart and above the 0.10 line of the shot filed on 21 October: six sessions scored, none against it. Nvidia fell 1.17% on the day the chip funds rose; Micron rose 5.86%, no stamp held. New York counted 1,189 risers to 1,481 fallers; Nasdaq 2,851 to 2,022 with 72 new lows against 64 new highs.

Earnings or guidance:

The two bills are in the letter above. The rest: Microsoft’s GAAP EPS 4.92, Azure 33.17 billion; ServiceNow 20:10 UTC, subscription revenue 3,988 million, 15% lower on a relay; Fortinet 25% lower on a relay. In the cash session Enphase fell 16.03% on Tuesday’s after-hours result, Xylem 4.99%. The four names marked yesterday on their own results: Boeing 0.62% lower, SoFi 4.51% higher, UPS 0.44% lower, Royal Caribbean 0.80% higher; three continued, one faded. Today: Mastercard before the open, Amazon and Strategy after the close; Apple is listed for Monday on a single route.

Cross-asset nuance:

Five of fourteen Treasury tenors rose, eight fell, one held: the 1-year 4.47%, down 3 basis points; the 2-year 4.67%, down 3; the 5-year 4.85%, up 3; the 10-year 5.05%, up 6; the 20-year 5.41% and the 30-year 5.37%, both up 7. 2s10s 38 from 29; 2s30s 70 from 60. The three-month VIX read 19.22 against 16.91 spot, a ratio of 0.88, contango. The dollar closed 102.15, down 0.21%; dollar-yen 157.81. Long Treasuries fell 0.78% on the proxy, investment grade 0.22%, high yield 0.01%: on the durations held here, investment grade a touch tighter and high yield in line. December WTI 102.78 at settlement, 101.70 on the 08:50 UTC bar; January 100.99; December Brent 115.32, January 111.64. Gold spot 4,066.83, up 0.18%, and 4,019.01 on the 08:50 UTC bar; December gold 4,051.60, down 0.56%, settled at 17:30 UTC before the late rally; December silver 53.67; December copper 6.67. The 7-year prices at 17:00 UTC against trailing covers of 2.51, 2.52, 2.50, 2.49, 2.50 and 2.42; the Treasury’s feed still has no record of Monday’s 2-year or Tuesday’s 5-year.

Crypto Market Edge

Up 0.57% on the Day, Down 1.73% on the Mark by Breakfast, and the Flow Page Returned an Error 4 Times Bitcoin 81,237.85 at midnight, 79,833.61 on the 08:50 UTC bar, and a route that failed on both coins at once

Price snapshot:

Bitcoin marked 81,237.85 at 00:00 UTC, up 0.57% on Wednesday’s 80,776.86, UTC-day high 81,693.16, low 80,301.95. It read 79,833.61 on the 08:50 UTC bar, 1.73% below the mark; Coinbase 79,757.12 at 07:40 UTC, 0.04% apart. Ether marked 2,356.57, up 0.43%, and read 2,310.67. Bitcoin turned up for the Fed and left before breakfast.

Flows and positioning:

No bitcoin fund row is held for Tuesday or Wednesday: the Farside bitcoin page returned a client error on four cache-busted reads, a first. The ether page served its launch-era fragment on both reads, a third edition. Cumulatives stay frozen at 57,361 million and 12,748 million. The shot filed on 20 October on ether issuer concentration stays at three scorable sessions, two against it, and has lost three sessions to the route.

Leadership and rotation:

On the crypto board at 07:32 UTC bitcoin ranked first at a canonical sentiment score of 29 on 685,183 watchers, ether second at 23, SUI third, Compound fourth, XRP fifth; PEPE fell from first to 24th. Strategy sat off every board at 18 ahead of its results. Robinhood fell 3.31%.

Catalysts and roadmap:

Today 12:30 UTC: Q3 GDP advance, September PCE, jobless claims. ECB 13:15 UTC. 7-year auction 17:00 UTC. Strategy and Amazon after the close.

TL;DR

• The Fed held at 3.75 to 4.00%, 10-2, both dissents for a hike; the 2-year fell 3 basis points to 4.67%, the 30-year rose 7 to 5.37%.
• Yesterday’s written test landed on both legs: the MOVE closed 94.55, its lowest since 22 September, the 2-year within 5 basis points of 4.70%.
• Alphabet reported 127.58 billion dollars of revenue at 20:02 UTC and 51.4 billion of capex on the call; Nasdaq futures read 1.27% lower on the capture bar.
• The S&P 500 rose 0.28% on 1,189 risers against 1,481 fallers, 72% before 18:00; the count is of every New York listing, not of the index.
• Bitcoin marked 81,237.85, up 0.57%, and read 79,833.61 on the 08:50 UTC bar; the bitcoin flow page failed four reads, the ether page served July again.

Fun Fact

2 Days of Meetings, 0 Mentions of the Election The chair said the midterms did not come up once

Five days before the 3 November midterms, the Fed chair told reporters he “did not hear one mention” of them across the two-day meeting, per a Mace News flash at 18:58 UTC. The same press conference announced that one of next year’s eight meetings will carry no rate vote and no statement: a day off from deciding, booked in advance.