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Early Morning with Dave
BoJ Helps Build on the Renewed Risk-on Trade

BoJ Helps Build on the Renewed Risk-on Trade

BoJ comments ease market anxiety

David Rosenberg's avatar
David Rosenberg
Aug 07, 2024
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Early Morning with Dave
Early Morning with Dave
BoJ Helps Build on the Renewed Risk-on Trade
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Highlights

• BoJ comments ease market anxiety

• Dip buyers are back as downturn concerns get pushed aside

• Don’t wait for negative job prints — labor market dynamics signal recession

• Bond bulls will enjoy how much the Fed needs to cut just to get to “neutral”

While We Were Sleeping

Well, what was most fascinating in the stock market rebound yesterday was how equities could not hold on to a good chunk of the hard-fought gains earlier in the session. This has been a recurring theme on the up days in recent weeks. From the intra-day high to the close, the Dow lost 452 points (at one point it was on its way for its best day of the year), the S&P 500 lost 72 points and the Nasdaq lost 254 points. Call it the late fade. While bond yields have backed up, all the major trendlines for the 10-year T-note yield reside around 4.3% and we are still some 40 basis points below that. A quick look at the Bloomberg chart shows that next to nothing has really happened here with this giveback we have seen from the panic bond-buying we witnessed on Monday morning.

U.S. equity market futures are exactly where they were this time yesterday — up rather decently (nearly +300 points for Dow futures — nobody seems to care too much that the less pro-business Harris-Walz ticket has now built a 3-point lead in the polls, 51% to 48%).

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