Macro situation and the safest way to short Vinfast using Options Arbitrage
In this video Steve updates and analyzes the employment report and Q2 GDP revision on 08/30. Additionally, I outline the safest and least risky ways to short or long Vinfast exploiting IV for Options Arbitrage.
ADP employment report significantly down in August: Job market cooling off
In August, nonfarm payrolls recorded 177,000 jobs, a significant drop from 324,000 the previous month. This is the lowest increase since March this year.
Leisure and hospitality sector had the lowest job growth, only 30,000 in August after a period of high growth.
Wage growth slowed significantly, with continuing employees at old companies up 5.9% annually (slowest pace since Oct/2021). Job changers up 9.5% annually.
Following yesterday's JOLTS data, it further shows the job market is slowing significantly. Review the article on JOLTS
Q2 GDP shows signs of slowdown - Fed rate hike expectations decline
Real Q2 GDP revised to 2.1% (lower than expected 2.40%)
This slowdown comes from export decline, slower consumer spending and government spending.
Core PCE price index also fell to 3.7 (from previous 3.8) showing that spending tightening has had a positive impact on prices.
According to CME Fed Watch, probability of Fed holding rates at 5.25%-5.50% in September rose to 90% this morning from 86.5% yesterday.
Pending home sales unexpectedly rise in July
Pending home sales index in July up 0.9% m/m (vs forecast -0.6%). However, still down 13.8% y/y.
However, existing home sales continue to decline sharply due to high mortgage rates and low housing inventory.
Crude oil inventories fall to lowest since 2022
According to API report, crude oil inventories plunged -10.584 million barrels, vs expected -3.267 million barrels.
Meanwhile, Biden administration added to Strategic Petroleum Reserve (SPR) for 4 straight weeks (+594,000 barrels).
Crude oil inventories fell to lowest since Dec 2022, much larger than market expectations, due to negative impact from global trade situation.
WTI oil price currently fluctuating below $82.
European Central Bank (ECB) cannot stop raising rates
High European rates are burdening borrowers with mounting debt. However, Germany's real yield curve suggests rates may continue to rise.
Germany's 2-year bonds trading higher than expected, raising doubts that ECB lacks measures to control inflation, leading to pressure for higher rates pushing bonds higher.
Some other news:
Visa, Mastercard expected to raise credit card fees.
Hong Kong dollar down 0.6% in August, heading for strongest monthly drop in 40 years due to pessimism over Chinese economy.
NVIDIA continues record rally 234% YTD, strongest in S&P 500 after AI deal with Google.
Court approves Grayscale to launch first spot Bitcoin ETF, reversing SEC decision. Bitcoin price surges.
Apple to hold new product launch event at 1am Beijing time on 09/13.
China approves 37 investment funds to revive the market. However, specific fundraising timeline not yet determined.
China officially directs 2 banks to bail out Zhongrong shadow banking system with backing from state-owned China Construction Bank, due to concerns over widespread bank weakness.
Comments (0)
No comments yet
Be the first to comment
Login to comment