Twelve Point Eight Points of Fed. Five Basis Points of Bond.

Stock Market Edge

The Front End Has Now Ignored Everybody

A speech, two supply shocks, a jobs miss and a governor, all for small change

Premarket snapshot:

S&P futures traded 7,761.75 at 05:00 ET, up 0.09%. Nasdaq futures added 0.44% to 29,655.00. Dow futures slipped 0.04% and Russell futures managed 0.03%. After a 1.06% cash session, the overnight market is holding absolutely still, which is the correct response to a print you cannot see yet.

Sector rotation:

Snowflake rose more than 16%. Broadcom fell another 2.5% in cash trade, still punished for guiding fourth-quarter revenue 230m light on a 35bn quarter. Ciena beat by 38 cents, raised full-year guidance above consensus, and fell anyway. Schwab logged 86 new 52-week highs against 44 lows, a market that cannot decide what it is.

Earnings or guidance:

Lululemon cut its annual forecast after the bell and lost 18%. That is the week’s largest single-name gap, landed fourteen hours before the labour data. Ciena is the more interesting one, because a beat plus a raise being sold breaks the rule everybody adopted last week to explain Broadcom.

Cross-asset nuance:

Treasury CMT closes: 4.34% at two years, 4.77% at ten, 5.25% at thirty. The dollar fell 0.58% to near 99.00, the yen up over 1% to 156.1. ISM services expanded to 55.4 while its employment component stayed in contraction at 47.8 and prices rose to 72.6.

📊 There’s a level on SPX I’m watching closely this morning. My full analysis briefing has it – plus what happens if we hold it, and what happens if we don’t. [Read it here →]

Crypto Market Edge

Digital Gold Rallies on the Word of a Fiat Bureaucrat

Up 4.7% in two sessions, and not one of them was about bitcoin

Price snapshot:

Bitcoin traded 81,547 dollars at 16:30 ET Thursday and 81,116.63 in Friday premarket, off 0.18%. On 2 September it sat at 77,444. That is roughly 4.7% in two sessions, and the entire move maps onto the collapse in hike odds. The 80,000 to 82,000 zone flagged as the breakout gate has been taken back.

Flows and positioning:

We carried a September inflow figure for two editions and it was wrong. Spot bitcoin ETFs lost 236.46m dollars on 1 September, IBIT alone accounting for 201.18m, reversing a 216.70m inflow. August took 3.52bn against 172m in July and lifted fund assets 31% to 99.61bn.

Leadership and rotation:

Ether products drew about 11m dollars and XRP about 14.4m on the session bitcoin bled 236m, so the money rotated rather than left. Robinhood added about 15% to 123.02 dollars, with calls running near three to one on six times average volume. The listed proxy moved harder than the asset.

Catalysts and roadmap:

Payrolls at 08:30 ET. Labor Day closes the market on Monday. Ottawa’s countermeasures on roughly 20bn dollars of US goods stay dated 8 September. Then PPI on the 10th, CPI on the 11th, and an FOMC meeting on the 15th and 16th carrying fresh projections.

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TL;DR – The Bottom Line

• Waller is not the Chair and moved September by 12.8 points anyway. The two-year moved five basis points, of which roughly three are just September. Somebody is wrong.
• The S&P rose 1.06% to 7,747.71, its best day since 4 August, on a governor’s interview rather than on any data. The data arrives at 08:30.
• Ciena beat by 38 cents, raised guidance above consensus, and was sold. That breaks the rule we adopted last week to explain why Broadcom got sold.
• Six ships crossed Hormuz against a ten-day average near 13, diesel set a record at 5.82 dollars, and crude settled up 0.32%. The barrel is unbothered.
• Payrolls at 08:30, Labor Day Monday, then PPI, CPI and an FOMC with fresh projections inside eight trading sessions. The coin flip does not stay a coin flip.

📌 Fun Fact

Iran Spent August Stamping Its Neighbour’s Paperwork

Iraqi exports nearly doubled while the blacklist got longer

Iraq lifted oil exports to roughly 2.34 million barrels a day in August from about 1.35 million in July. Two Iraqi energy officials cited heavy discounts and, more remarkably, Iranian approvals for Iraqi tankers to pass through the strait. Iran spent the same month adding vessels to the list it will fine, confiscate or detain. Paperwork, it turns out, is exempt from the war.