H-town ag said:

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Wes****er call on Thursday. $WWR
https://www.businesswire.com/news/home/20210809005847/en/Wes****er-Resources-Announces-Second-Quarter-Conference-Call-and-Update-on-Its-Coosa-Graphite-Plant

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Sweet. WWR $2 here we come.

Mornun!

More or less flat early.



SKEW - Lowest since June 4th at 148.27? Hmmmm.....let's see what the precedes.
VIX - Has had little movement the past few trading days.
SPY & Qs - Relatively narrow ranges past few trading days.
IWM - Well couldn't hold the 50EMA....again.

Maybe we grind sideways here a bit more other than select names that breakout. Dunno....

IWM - I think its due to move here one way or the other near term.


Everything seems fine....



Trade wisely!

U.S. TREASURY YIELDS CURRENTLY UP FOR FIFTH STRAIGHT DAY IN LONGEST DAILY RISING STREAK SINCE END JAN/EARLY FEB

— *Walter Bloomberg (@DeItaone) August 10, 2021

WWR with a new buy rating

Tuesday Macros

Treasuries Holding In...But For How Long? Fed Govs Ganging Up on Tapering

There was good two way flow overnight in the treasury space... Buyers in Asia while sellers in London... 10 year got to 1.305, but no further...Even with the plummeting of the German Zew Expectations, 27% lower than the survey, could not get the rate structure to rally... And now we are hovering at 1.33 10 years and .80 5 years... What we said yesterday was that we were looking for 10 years to break 1.31, 5 years to break .78, and 10 year futures to close below 134... All were achieved... But the treasury space is trying to hang in... Meanwhile corporate issuance was huge yesterday at 17 billion for 15 issuers... And mortgage convexity selling is not far off... Fed governors are ganging up on the Chair calling for tapering sooner rather than later... Yesterday we saw Bostic and Rosengren talk about aggressive tapering, while Barkin was in the same camp, just less aggressive... This is on top of Kaplan and Bullard, who have been the early leaders of tapering now... Mester speaks today and Evans is holding some type of event with the Media... As far as we can see, Powell is on an island of holding off on tapering, along with Williams and probably Evans and Kashkari...but the taper now mode is circling the wagons around the doves.

Rates... 10 year at 1.33, next level of support is 1.36 and 1.42 after that... Morgan Stanley is calling a 1.43 level where convexity selling comes in... Being a long term trader, we remember fears of when Fannie and Freddie convexity selling was a huge market mover... But now with the largest holder of mortgages in the world being the Fed, who does not manage their duration risk, the fear of convexity selling is muted... As for the next level of interest on rates to break are .82 on 5 years and 133-16 on 10 year futures

Corporate treasurers are seeing the writing on the wall and came to market yesterday with 17 billion across 15 issuers, the most in almost a year. Uber drove deals in the junk market raising 1.5 billion. They issued an 8 year, 4.5 8/15/29 at 332 spread versus an OTR treasury B- rating...5 other companies came to market in the junk space to take the days tally to over 5 billion...expect more today as the writing is on the wall... Great demand for new issues before rates soar and spreads widen. CDX spreads are still in their range, but for how long?

Governments will not stop trying to bring more stimulus into a heated economy... While Delta variant is clearly the focal point of the evening news, we still think the US economy is moving forward... And the pent up demand for goods and services remain high... If anything the variant continues to play havoc with supply chains... The Senate will likely pass the first of the infrastructure bills today... While they take their victory laps, the House is not in session and will probably only pass this bill if it comes with a hugely inflationary 3.5 billion reconciliation bill... Meanwhile we see in the Chinese Daily that the PBOC , the Chinese CB, has been directed by the Politburo to fine tune their economy by easing rates, injecting money and further lowering of the reserve requirements

Equities are not doing much so far today... They are in a zone waiting to see what the next shoe to drop...BB Intelligence ( we disagree with their rate views but like the team) reported this morning that the Q2 reporting period has been the strongest on record (94% YOY EPS growth in the US versus 50% expected, and European EPS rising 178% versus expectations of 132%).

Brainard... Meant to include her in the dove camp... Another article in the WSJ saying that if Powell does not get reappointed she is the likely candidate... Clearly some of the WH staff do not want Powell reappointed, hence we are seeing more and more stories about Brainard... While we have no issues with Brainard, and we do not think Powell gets reappointed, we still think Bostic is very much in the running... All good candidates.. Unfortunately when the epitaphs or the books are written, Powell will be remembered for letting inflation get away... And keeping rates too low for too long... Just like Greenspan...

Choppy day, but watch the rates market... It could signal a bigger move ahead...

TTD with several PT increases this morning.

Remember that when rotation out of tech happens, AAPL doesn't always behave the same way........it's not really a "growth" name anymore.