Nemenoff Report 8/15/2019
Financials: Sept. Bonds are currently 0’27 higher at 165’24, 10 Yr. Notes 0’075 higher at 130’24.0 and 5 Yr. Notes 0’0425 higher at 119’08.5. A lot has happened in the 2 weeks since my last “Report” (last week I had a computer problem). Interest rates have dropped to historic lows of under 2.0% in the 30 Yr. Bond, the yield spread between the 2 and 10 year notes inverted for s brief moment with the 2 year yielding a couple of basis points more than the 10 year and data showing Europe’s and China’s economies slowing and contracting. In Econ 101 these market activities could be interpreted as a harbinger of a coming recession. We have been stopped out of a short 5 Yr. Note position. We continue to hold the long Dec.19/short Dec.20 Eurodollar spread of which I am willing to take a small loss on a bounce to 35 points premium the Dec.20 contract. I do not have a long term recommendation at this time and will treat the market as a trading affair. Expect a rate cut in either Sept. or Dec.as it seems that globally we are engaged in competitive rate cuts.
Grains: I will state the obvious “long is wrong”. Crop Reports indicate there is more acreage and more Corn than traders anticipated. Many question the government numbers, only time will tell. I am on the sidelines. I recommend using options for positions as the futures are exceptionally volatile at the present time.
Cattle: Live and Feeder Cattle prices dropped sharply since a large fire Friday evening closed the Tyson meat packing plant in Garden City Kansas. This plant accounted for 6-7% of all U.S. slaughter and it will take sometime to figure out the logistics of shipping cattle to other facilities. I will try the long side of Oct. LC below 98,00
Silver: Sept. Silver is currently 13 cents lower at 17.15. I remain long.
S&P’s: Sept. S&P’s are currently 12.00 higher at 2853.00. The market has broken sharply in the last few days for all the reasons stated earlier in this “Report”. I am a seller above 2883.00. Long term support is in the 2750.00 area.
Currencies: I am currently on the sidelines. If a no deal Brexit comes to fruition I will expect a break in both the Pound and Euro