Markets Weekly July 6, 2024

Hello my friends, today is July 6 and this is Markets Weekly. So this past week we had a shortened holiday week due to the 4th of July, but when markets are trading they were basically going up and we closed the week at new all-time highs. Today I want to talk about three things. First, I want to talk about why I'm very cautious on the stock market right now, despite being on team crash up. Secondly, I think the big news that has week was all political news and that's really important because remember markets are downstream from politics.

你好，朋友们，今天是7月6日，这是每周市场简报。本周由于7月4日的假期，市场交易时间缩短了，但在交易的日子里，市场基本上是上涨的，并且我们以历史新高的点位收盘。今天我想谈三件事。首先，尽管我目前在看涨的阵营，但我对现在的股市非常谨慎。其次，本周的大新闻都是关于政治的，这非常重要，因为要记住，市场是政治的下游。

So let's talk about how it seems that the establishment is collapsing across the western world. And lastly, let's talk a little bit about the housing market because there are more more signs that the housing market is definitely slowing but no sign of a collapse. Okay, starting with the stock market. So when I look at the stock market, it looks like this in P500 and the NASDAQ are going to the moon, going up every single day and you know some might even say that they are going parabolic. Now when I see this, this is very concerning to me because it tells me there's a lot of speculation and a lot of leverage in the market and anecdotally I get the sense that there are more and more retail involvement in the market and leverage today is not margin debt which is what it used to be.

好，让我们来谈谈似乎整个西方世界的既得利益结构正在崩溃。最后，我们再稍微谈谈房地产市场，因为有越来越多的迹象表明，房地产市场确实在放缓，但没有崩盘的迹象。 好的，先从股市开始。当我看股市时，标普500指数和纳斯达克指数似乎每天都在上涨，甚至有人可能会说它们在呈抛物线式上涨。这让我非常担忧，因为这告诉我市场上有很多投机行为和杠杆。而且，我感觉越来越多的散户投资者参与进来，目前的杠杆也不是过去那种保证金债务类型的杠杆。

Leverage today is options, specifically co-options and as we all know there's a lot of co-options activity in the market. Now this sets up for a market that's very fragile because you have a lot of people on one side of the boats, all highly levered. A slight you know setback, a slight external shock could really have a downward cascading effect in this context and this is something that we see over and over again throughout history across the world. So I'm very positive on a stock market as you guys all know I'm on team crash shop and I think that we are going to go higher than anyone expects.

如今的杠杆主要集中在期权上，特别是协同期权（co-options），我们都知道市场上有大量的协同期权活动。这导致市场非常脆弱，因为很多人都站在同一条船的一侧，杠杆程度非常高。即使是轻微的挫折或外部冲击，在这种情况下，也可能引发一连串的下跌效应，这在全球历史上屡见不鲜。尽管如此，我对股市持非常乐观的态度。正如你们所知，我是“崩盘团队”的一员，我认为我们将会有超出任何人预期的上涨。

I've been telling everyone that for several months but that just doesn't mean going up every single day. If we keep going up like this we have a high risk that we could overheat and then have a downward cascade where the correction goes further than you would expect and longer than you would expect. So I think the best scenario for the market right now is if we pull off a bit, pull back a bit, consolidate and then we can go back up again. But right now I don't like what I'm seeing. Now just looking across the world, let's say looking at Euroland over the past few years we had a global equity market rally.

过去几个月我一直在告诉大家，但这并不意味着每天都在上涨。如果我们继续这样上涨，我们有很高的风险会过热，然后会出现一个下跌的级联效应，修正幅度比预期的更大、时间也比预期的更长。所以我认为，现在市场的最佳情景是我们稍微降温一点，稍微回调一下，整固之后再继续上涨。但是现在我对目前的情况并不满意。放眼全球，看看过去几年欧元区的情况，我们经历了一次全球股市的上涨。

We went up, they went up and right now over the past few months if you look at the stock market indexes in the UK and France and Germany they've basically been to consolidating over the past few months. If you want to look at other indicators of risk sentiment let's look at crypto. Now Bitcoin had a really bad week but if you look at the altcoins they are having an even worse week. Now over the past few years I've noticed that a crypto seems to be the most sensitive risk on asset and it's not been doing very well. Now looking at the news the past week it looks like the biggest bear on Wall Street, JPMorgan's Marco is leaving the firm.

我们上升了，他们上升了，而现在如果你看过去几个月中英国、法国和德国的股票市场指数，它们基本上一直在整合（调整）。如果你想看其他风险情绪的指标，我们来看看加密货币。现在，比特币这一周表现很差，但如果你看看其他山寨币（altcoins），它们这一周表现更糟。在过去的几年里，我注意到加密货币似乎是最敏感的风险资产，而它最近的表现并不好。再看一下过去一周的新闻，华尔街最大的空头之一——摩根大通的Marco正在离开公司。

There are no more bears on Wall Street. So again I'm looking at this totality of it and I'm getting the sense that we are probably at some kind of close to some kind of tipping point where we're probably going to get some kind of correction. I've been saying this for a couple of weeks, been totally wrong but I'm sticking to this. So again I'm very cautious on the market right now. I'm seeing a bit too much euphoria. All right now the second thing I want to talk about is the big political developments we've seen the past week. Again this is really important because the government is the most important actor in the economy in the markets.

华尔街上已经没有更多的熊市了。所以，我再次从整体上看，我感觉我们可能接近某个关键点，可能会出现某种修正。我已经这样说了几个星期，虽然一直完全错了，但我坚持这个观点。所以，目前我对市场非常谨慎。我看到有点过度乐观了。好，第二件我想谈的是我们在过去一周看到的重大政治发展。这真的很重要，因为政府是在经济和市场中最重要的角色。

What fiscal policy does, what monetary policy does in my view though these are the most important factors that shape price action. So last week we talked about how Biden's poor performance at the debate shifted the odds in favor of a Trump presidency and so many Trump trades were running. We saw prison stocks surge, we saw long-related interest rates go up a bit. Now this past week we had some new developments on the political front. Right now the markets are actually thinking that it's more likely that the Democratic Party nominee will be Kamala Harris instead of President Biden.

财政政策的作用和货币政策的作用是影响价格走势的最重要因素。我认为，这是影响价格行动的最重要因素。所以上周我们讨论了拜登在辩论中的不佳表现如何使特朗普当选总统的几率增加，导致许多与特朗普相关的交易活跃。我们看到监狱股票飙升，长期利率也有所上升。现在在过去一周里，政治方面有了一些新的发展。目前市场实际上认为，民主党的候选人更有可能是卡玛拉·哈里斯，而不是总统拜登。

And interestingly despite this pretty big development markets are still pricing in about a 60% chance of a Trump victory this November. So it doesn't seem to have a big market impact so far but I'm getting the sense that the market is probably a bit too complacent about a Trump victory because there's a good chance that maybe Vice President Harris just won't be the nominee and if we have other people emerge say aggression Whitmore or Gavin Newsom I think the odds become a lot less difficult to place going into November. Now at the moment President Biden is still quite. adamant that he will not leave. He is going to be the nominee but we also see forces gathering within the Democratic Party that are trying to push him out. Notably very big name donors are saying that they don't want to donate to President Biden thinking that it's a lost cause again without money it's very hard to run a campaign and you also have Democrats within Congress trying to push President Biden out. Like we mentioned last week politics is a team sport if you have an unpopular president at the top of the ticket everyone down ticket is going to suffer so a lot of these guys are thinking that well if Biden's going to be the nominee it's going to impact my chances of getting elected in the house or in the Senate and so they they don't like that. So and I think the betting markets are right that President Biden will not be the nominee but beyond that I think we're going to begin for a few more weeks of turmoil it's going to be very exciting and I think that it's a risk factor for the markets in the US.

有趣的是，尽管有了这一重大进展，市场仍然预测特朗普在今年11月胜选的概率约为60%。因此，似乎这还没有对市场产生重大影响。但我感觉市场对特朗普胜选的态度可能过于掉以轻心，因为有很大可能副总统哈里斯不会成为候选人。如果有其他人出现，比如格雷琴·惠特默或加文·纽森，那胜负的几率就会变得更难预测。目前，拜登总统仍坚决表示他不会退出，他将成为候选人。但我们也看到，民主党内有力量在试图将他推下台，尤其是一些大牌捐赠者，他们认为支持拜登是没有希望的事。不拿到钱，竞选很难进行。同时，国会内的民主党人也在试图推翻拜登。正如我们上周提到的，政治是一项团队运动，如果总统在选票的最顶端不受欢迎，以下的所有候选人都会受影响。这些人很多都认为，如果拜登成为候选人，会影响他们在众议院或参议院的选举机会，他们对此不满。所以，我认为博彩市场的预测是正确的，即拜登不会成为候选人。但是，接下来几周可能会很动荡，会非常有趣，我认为这对美国市场来说是一个风险因素。

But I think the big election the past week was what happened in the UK. What we're seeing is the complete complete destruction of the Tory which is the right-leaning party in the UK. They absolutely got slipped out of office so right now we're seeing the Labour Party which is the more left-leaning party in the UK take a majority in their legislator which is going to give them a lot of power to carry out their agenda. Now markets are actually pretty complacent about this part of it was probably because it was expected but also part of it is that you know the the vision between the Tories and the Labour are not as polarised as they are and say in France or in the US. Now the big problems confronting the the UK government of course like everywhere else in the world inflation people are unhappy that their living standards are declining they're unhappy about social services for example health care in the US UK you famously have to wait a long time before being able to see a doctor and of course migration has surged in the UK like it has in many other countries and a lot of people are feeling uneasy about this and it's trading social services as well.

但我认为上周的大选是英国发生的事情。我们看到的是保守党——英国的右翼政党的彻底瓦解。他们完全失去了执政权，所以现在我们看到的是工党——英国的左翼政党在立法机构中占据多数，这将使他们有很多权力来实施他们的议程。现在市场对此实际上相当平静，部分原因可能是预期之中的，但也部分原因是保守党和工党的立场并不像法国或美国那样那么极端对立。 目前英国政府面临的最大问题当然和世界其他地方一样是通货膨胀。人们对生活水平下降感到不满，他们对社会服务感到不满，比如在英国，看医生需要等待很长时间，这在美国也是广为人知的情况。当然，英国的移民数量也像许多其他国家一样激增，很多人对此感到不安，这也给社会服务带来了压力。

Now Labour well it's going to have a they're going to have a lot of challenges they have to confront what they do seem to be very clear about is they want to build a lot more houses to alleviate the housing shortage and so that seems to be very friendly to home builder stocks in the UK. But of course the big big big news of course in the Europe is the upcoming French elections tomorrow Sunday like we discussed last week there is very there was a chance well there still is a chance of just the rise to power of the right leaning a resamme lemong nationale which has a very different vision for for France. But political developments over the past week have made resamme lemonge nationale majority much less likely in in France and so I think that's calmed markets a bit.

现在工党将面临很多挑战，他们似乎非常明确的是想通过建造更多的房屋来缓解住房短缺问题，这对英国的房屋建造股是个好消息。不过，当然，欧洲的大新闻是即将到来的法国选举，就像我们上周讨论的那样，右翼的“全国集合运动”（勒庞的党派）有可能上台。该党对法国有着非常不同的愿景。但是，过去一周的政治发展使“全国集合运动”获得多数席位的可能性大大降低，所以我认为这让市场稍微平静了一些。

So so let's have a little bit of an overview about how this election process works. First of course in France you have two rounds of elections first round and then you have a legislator first round election a lot of people run and then you have a second round where you have basically have a runoff. But in the event that a third party also did very well in the first round you could still have a three-way election on the second round. Now what happened the past week was that the left-leaning party in Nubo from Palpelaire and the more centrist party and Macron's party basically got together and they are trying to push out the right-leaning party by saying hey if there's an election where either the from Palpelaire is third or Macron's party is third place we're just going to bow out and we're going to tell our members to vote against the resamme lemonge nationale.

让我们先概览一下这个选举程序是如何运作的。首先，法国的选举分为两轮：初选和决选。在初选中，很多人会参选，然后在第二轮中，基本上会进行决胜投票。但如果有第三方在第一轮表现也非常好，那么在第二轮中可能会出现三方竞争的局面。上周发生的事情是，左倾的Palpelaire党的Nubo和更中间派的马克龙党联合起来，他们试图通过这样一种办法来排挤右翼党派：即如果在某个选举中，Palpelaire党或者马克龙党处于第三名，他们就会退出，并且号召他们的支持者投票反对国民联盟党（Rassemblement National）。

So if you look at the data you can see that for a lot of these districts the for for a lot of these districts where the resamme lemonge nationale had a plurality of the votes the second and third place votes were were not that far behind but when you combine them together the second and third place runner-ups so basically people who belong to either the left-leaning party or the center party together is enough to push or it's enough to push out the first place winning rosam lemonge nationale candidate. Now if their plan works then that really makes it very difficult for the right-leaning party to gain a majority control in a legislator and thus form a government and push through their agenda.

所以，如果你查看数据的话，你可以看到在很多选区中，国家联盟党（Rassemblement National）拿到了最多的选票，但第二名和第三名的票数其实差距并不大。如果将第二名和第三名的选票合在一起，也就是左翼党派和中间党派的选票加在一起，实际上就足以超过获得最多选票的国家联盟党候选人。如果他们的计划成功，这将使右翼党派很难在立法机构中获得多数席位，从而组建政府并推动他们的议程。

Now polling seems to suggest that it's very very unlikely for the right-leaning party to gain power and so it seems like the most likely outcome tomorrow, Sunday, is that you are going to have a fragmented legislator which means that nothing gets done and I guess it's more market-friendly as and there's less huge deficit spending, less big changes in the legislative agenda but again this is highly uncertain and there's going to be a lot of strategic voting it's easy to see how left-leaning parties can band together to defeat right-leaning parties but I think it's a little bit less certain whether or not the center will actually go and vote for the left instead of for the right I think some people in the center are very uneasy with the economic policies of the left-leaning parties over there but so far markets are I think have taken comfort into the reduced probability of the big change in direction of the legislator where you would which was what you would see if the the resolvable national rose to power so let's see what happens on Sunday again tail risks are diminished but we can always have a surprise polling is difficult for the second round okay the last thing that I want to talk about is what we seem to be seeing is a slowing housing market

现在的民意调查显示，右翼政党获得权力的可能性非常非常低，因此明天（星期天）最有可能的结果是立法机构将变得支离破碎，这意味着什么事情都无法推进。我猜这对市场友好一些，因为这样会减少巨额赤字开支，立法议程的重大变化也会更少。但是，这一切仍然很不确定，可能会有很多战略性的投票。左翼政党可能会联合起来击败右翼政党，但我认为中间派是否会投票支持左翼而不是右翼，这一点还不太确定。我觉得一些中间派对于左翼政党的经济政策感到不安。但到目前为止，市场对立法机构出现重大方向变化的可能性降低这一点感到安慰，因为如果右翼上台，立法机构的方向会发生重大变化。看看星期天会发生什么，尾部风险减少了，但是仍然可能会有惊喜，第二轮投票的民调是很难预测的。最后，我想谈谈我们似乎看到的房地产市场放缓的情况。

Now housing has been super resilient all throughout this rate hiking cycle many people thought that the future would look like the past again we had a housing crash in 2008 many people thought that when mortgage rates went to 7% and they've been at 7% for some time that housing market will completely tank that did not happen at all in fact housing prices gradually rose but now we're seeing some definite softness in the housing market first let's look at the upcoming supply for houses now the leading indicator for this was single housing building permits construction starts and you're seeing that indeed there has been a significant drop-off in applications to build new single-family homes again that's a strong sign that housing activity is slowing now the reason for this seems to be that the builders have just an enormous inventory of new homes that they're trying to sell now new home inventories are at levels on last scene since a pre-grade financial crisis pre-2008 so it seems to be that builders saw that they were having a tremendous demand for their product built a lot but have been having trouble selling them possibly to be due to higher mortgage rates impacting affordability and so they're just kind of slowing down since they have a lot of inventory and that seems to be causing some anecdotal softness in prices and looking around I'm hearing more and more that at least at the very least prices are not going up for new construction and in some places they're declining a bit

现在，在整个加息周期中，住房市场表现得非常具有韧性。许多人认为未来会像过去一样，比如我们在2008年经历了一次房地产崩盘。很多人认为当抵押贷款利率上升到7%，并且持续一段时间后，房地产市场将会彻底崩溃。但实际情况并非如此，房价实际上逐渐上涨。不过，现在我们确实看到了住房市场的一些疲软迹象。 首先，我们来看看即将供应的住房情况。一个重要的领先指标是单户住宅建筑许可和开工情况。数据显示，申请建造单户住宅的数量确实大幅下降，这强烈表明住房活动正在放缓。 导致这种情况的原因似乎是建筑商有大量的新房库存待售。新房库存达到了自2008年金融危机前以来的最高水平。看来，建筑商在看到需求旺盛时，建造了大量房屋，但由于抵押贷款利率上升影响了购房负担能力，房屋销售遇到了困难。因此，建筑商放慢了建造速度，因为他们有大量库存。这似乎导致了价格的轻微疲软。根据我的观察和听到的信息，至少在新建房屋的价格上，现在已经没有上涨的趋势，某些地方的新房价格甚至有所下降。

now of course housing is very local nationally we still see home prices continue to rise but it does seem that they are softening a bit in addition to this again supply and demand looking at the demand side we do we still have very high mortgage rates but we also have very softening of the labor market now over the past few months the unemployment rate has steadily ticked up ticked up again this past month about 4.1 percent and in line with the softening labor market we also see wages decelerating now wage growth is still very healthy but it's been decelerating for months and as people have slower wage gains as mortgage rates remain very high naturally they're not going to be able to afford housing very high house prices and so what seems to be happening is that the builders are meeting them with a slightly lower or at least second home prices now this doesn't mean that the builders are not doing well when you look at the earnings reports of the builders well there still have very high margins looking at kb homes for example which is a builder for i guess the lower side part of the market their margins have surged over the past several years now they don't seem to be in distress at all what seems to be is that they have somewhat some degree of pricing power so rather than just keep increasing the supply of homes and just take market share they're happy with their position now if you look at the home builder stocks they surged the past few months they've been coming down a bit but they're still quite high so it doesn't seem like there's any sign of a crash no signs of distress from the major builders and again looking at home buyers whereas there's an affordability issue and unemployment still remains strong so it seems like the housing market is set to correct sideways over the coming months and if we do have let's say for whatever reason rates come down a bit in part due to fed cuts or maybe a more concern of a global economic slowdown you can see those market rates come down to a six-hando and maybe that would be supportive of things as well again the future is not always like the past there's no indication of a housing market crash but what we do see though is a lot of softening in the housing market that would be good for people looking to buy a new home

现在当然住房市场非常具有地方性。从全国范围来看，房价依然在上涨，但似乎有些放缓。此外，我们还需要考虑供需关系。从需求方面看，虽然抵押贷款利率仍然很高，但劳动力市场也在走软。过去几个月，失业率稳步上升，上个月又上升到了大约4.1%。与劳动力市场走软相呼应的是工资增长在减速。虽然工资增长依然健康，但已经持续减速了几个月。随着工资增速放缓，而抵押贷款利率依旧非常高，人们自然就无法负担得起很高的房价。因此，建筑商现阶段可能会提供稍微低一些的，或至少是二手房价。 这并不意味着建筑商的表现不好。看看建筑公司的盈利报告，以KB Home为例，这是面向中低端市场的建筑商，他们过去几年的利润率大幅上升。显然，他们并没有任何困境，似乎拥有一定的定价权力。与其继续增加住房供应来争夺市场份额，他们对目前的市场地位感到满意。如果看看房屋建筑商的股票，过去几个月它们飙升了一段时间，近期有所回落，但仍然很高。因此，没有任何迹象表明市场会崩溃，也没有主要建筑商陷入困境的迹象。同时，尽管存在负担问题，失业率依然较低。这意味着未来几个月房地产市场可能会横向调整。如果由于某些原因利率有所下降，例如美联储降息或全球经济放缓的担忧，市场利率可能会降到6%左右，这对市场会起到一定的支持作用。 总之，未来并非总是像过去一样，现在没有迹象表明房地产市场会崩盘，但我们确实看到市场在软化，这对准备买新房的人来说是件好事。

all right so that's all i prepared for this week again not much happening the past week and if you're interested in hearing more about my thoughts check out my blog at fedguy.com and if you're interested in learning more about how markets work check out my courses at centralbaking101.com talk to you all next week

好的，这就是我这一周准备的内容。过去一周没发生什么大事。如果你对我的想法感兴趣，可以访问我的博客 fedguy.com。如果你想了解更多关于市场运作的知识，可以看看我在 centralbaking101.com 上的课程。下周再聊。