Daily Market Commentary

Anthropic’s leaked IPO prospectus, as reported by Reuters and the Financial Times, shows the company is growing faster than ever while committing to obligations that dwarf its earnings. To wit, annual revenue rose roughly 12x in 2025 to $4.6 billion, from about $400 million in 2024. Its first-quarter 2026 revenue was $4.73 billion, and its […]

Monday’s Tweet of the Day in the Daily Commentary highlighted rising swap spreads and noted that Treasury issuance is not the problem many pundits make it out to be. Swap spreads are a great gauge for the health and liquidity of the US Treasury market, so it’s worth appreciating the Tweet below. A swap spread […]

Will 5.00% be the approximate ceiling for Treasury yields? Maybe, maybe not, but for bond investors, the risk-reward math is becoming very enticing even if yields rise further. Today’s yields provide a loss cushion that did not exist three years ago, and a return asymmetry heavily in investors’ favor. To appreciate this concept, consider that […]

McDonald’s (MCD) hit four-year lows last week, down 22% on the year and 31% from its March high, marking a seventh straight weekly loss, its worst streak since 2014. Many investors look at a stock like MCD as a verdict on the American consumer. While its sales can be telling, internal issues are driving the […]

Pimco faces losses of more than $35 million on a commercial mortgage bond tied to Philadelphia’s Centre Square office towers, according to Bloomberg. The complex was appraised at $471 million in 2019. Last month, a judge approved its sale for $70 million. That 85% drop pushes CMBS losses to the very top of the capital […]

Media speculation about a possible agreement between Iran and the US often focuses on President Trump’s incentives to end the war. In particular, high gasoline and diesel prices are creating real political pressure heading into the midterms, as we share below. Thus, the reasoning goes that Trump may cave to political pressure to reduce energy […]

Crude peaked at $106 on September 15 and has since fallen nearly 15% to $90. Despite the recent downturn, gasoline futures are up 1.9% over the same period. The margin between the two widened from roughly $40 to $58 per barrel. That is over three times the twenty-year median, $17, and sits in the 99.8th […]

The graph below, courtesy of Apollo, shows that not one FOMC member sees downside risks to the economy. This must be a very bullish signal, given that most FOMC members are seasoned business veterans or economists. Further, they are supported by over 400 PhD’s in economics. Unfortunately, despite the experience and educational background of the […]

The Dow has lost ground for three weeks running, down nearly 3.5% from its August 28 close, while the Nasdaq 100 is slightly higher over the same period. That performance gap has worried some market pundits, as they say it may be signaling a downturn. While that might be true, we think the performance differential […]

To justify hiking rates, Kevin Warsh and the Fed painted a rosy picture of the labor market. Interestingly, Warsh did so by citing record low jobless claims. To wit: Unemployment claims, on a four-week moving average, are running at levels consistent with full employment. So, the labor side of the Fed’s congressional remit is in […]

We hate to drone on about a Fed rate hike, but we want to stress the risks in the Fed’s 25bps hike, as it is unlike any other hike we have seen in over thirty years. Let’s contrast it with every Fed hiking cycle since 1994. Today’s starting point is unlike those instances; economic growth […]

The Fed hiked by 25 basis points and alluded to another hike, as the market expected and as we surmised in our prior Commentary. The more important takeaway from yesterday’s FOMC meeting is what comes next. In the prior Commentary, we pointed out three things to watch: the Summary of Economic Projections (SEP), the balance […]