Wall Street Petting Zoo

Market commentary and analysis by Christopher Carroll Smith

[Wall Street Petting Zoo @WSPZoo]

@KennyCap_Phd > he doesn't understand. pull out an illustrated diagram explaining what is per capita and what is per household
> he laughs and says "it's a good trend correction, sir"
> look inside
> it's per capita

[Wall Street Petting Zoo @WSPZoo]

@Greenbackd Mag7 price ratios don't seem that crazy until you look at price to sales. These big companies have incredible margins. Are those margins sustainable? is the trillion-dollar question.

[Tobias Carlisle @Greenbackd]

Ratio of Leading to Coincident Economic Indicators

* At or near the lowest level in 65 years, matching/exceeding the 2008–09 Financial Crisis trough
* The decline from the 2021-2022 peak has been sharp and sustained
* Historically, readings at this level have never occurred outside of recession or its immediate aftermath
* Unlike 2008, there is no sign yet of a bottom or reversal

However,
* the labor market and coincident indicators have remained surprisingly resilient. The denominator (CEI) has stayed strong, which mechanically depresses the ratio even if LEI isn't collapsing outright
* Some LEI components (like the yield curve and stock prices) may be distorted in the post-COVID era
* The 2022–2023 period showed a similar decline without a technical recession materializing, the so-called "immaculate disinflation"

[Wall Street Petting Zoo @WSPZoo]

Go easier on yourself, anon. Even JP Morgan has days when it just gives up.

[Wall Street Petting Zoo @WSPZoo]

It was a very "unflattened curve" kind of flu season in New York State this year. ("Subclade K" influenza had an unusually high rate of spread, so it burned its way through the population very quickly.)

[Wall Street Petting Zoo @WSPZoo]

Surprised there hasn't been an open letter to the governors of the Nasdaq 100 Index about the SpaceX listing. Folks afraid of getting sued?

[Wall Street Petting Zoo @WSPZoo]

Yikes, man. Almost 4%/yr inflation for the next 5-10 years? Bond yields aren't high enough.

[Liz Ann Sonders @LizAnnSonders]

May UMich inflation expectations revisions: 1y up to 4.8% vs. 4.5% initial; 5-10y up to 3.9% vs. 3.4% initial

[Wall Street Petting Zoo @WSPZoo]

After SpaceX's IPO, investors can purchase the privilege of losing $4.3 billion per year for just $1.5 trillion.

[Wall Street Petting Zoo @WSPZoo]

@Greenbackd Historically wide gaps do not, in fact, always eventually narrow

[Wall Street Petting Zoo @WSPZoo]

@Greenbackd Just wait till they list SpaceX at 2 trillion market cap, 130x price-to-sales, and 5x weight.

[Wall Street Petting Zoo @WSPZoo]

IMO, this marks the beginning of.a new interest rate regime. If I wanted to borrow money in the near future, I'd lock it in now while I still could.

[Wall Street Petting Zoo @WSPZoo]

US Treasuries are working on making a new one-year low, and there is every reason to think they're about to get a very serious beatdown

[Wall Street Petting Zoo @WSPZoo]

71% of Democratic women could win a fight with Trump, but only 46% of Republican men could

[Wall Street Petting Zoo @WSPZoo]

US Treasuries are working on making a new one-year low, and there is every reason to think they're about to get a very serious beatdown

[Wall Street Petting Zoo @WSPZoo]

Yesterday I put all my money in short-term Euro bonds, figuring no matter what happened-- if the war ended or Trump started a nuclear one-- the Euro would probably strengthen against the dollar. Obviously I missed the 3% Nasdaq jump today, but I'm up 1%, so I don't feel too bad.

[Wall Street Petting Zoo @WSPZoo]

@JoePostingg "The Julius Caesar option has to be on the table" is a very politic way to say "we have five and a half hours to kill the president"

[Wall Street Petting Zoo @WSPZoo]

Anthropic buying a nine-person biotech team for $400 million probably means you should panic-sell your pharmaceutical stonks, tbh

[Wall Street Petting Zoo @WSPZoo]

@David_Charts2 @TheStalwart Also: https://t.co/vJMP9Wg9QW

[Wall Street Petting Zoo @WSPZoo]

An underrated reason markets haven't collapsed: huge injection of liquidity due to government deficit spending. More or less the most flagrant TGA balance since post-pandemic crisis spending. And the Fed is starting to pivot toward easing, too. Lot of money sloshing around.

[Wall Street Petting Zoo @WSPZoo]

@David_Charts2 @TheStalwart I agree; the likeliest explanation is that there is enormous investment and productivity gain happening despite the war. Housing bill was genuinely rly good, and BigTech capex shows no sign of slowing down on high oil prices, although we'll see if helium becomes a bottleneck.

[Wall Street Petting Zoo @WSPZoo]

An underrated reason markets haven't collapsed: huge injection of liquidity due to government deficit spending. More or less the most flagrant TGA balance since post-pandemic crisis spending. And the Fed is starting to pivot toward easing, too. Lot of money sloshing around.

[Wall Street Petting Zoo @WSPZoo]

@danstevejon1 @TheStalwart I hadn't thought about it this way, but you're right; people used to speculate on housing, but demographic collapse and total YIMBY victory means housing is likely a bad investment and savings will flee to equities. Time to IPO.