Markets Weekly August 10, 2024

Hello, my friends. Today is August 10th and this is Markets Weekly. This past week was a super exciting week in markets so much so that we had an emergency podcast on Monday. Now at times it was pretty scary, but now at the end of the week as we look back, we have to wonder, was it all a dream? So today, first we're going to talk about three things. Let's summarize what happened this past week. Secondly, let's talk about how the market seems to have scared the Bank of Japan into backing off on their rate hike plans. And lastly, let's look at some new research from the New York Fed looking at post-pandemic labor market structures and suggesting that there really has been a structural shift when it comes to internal migration and the demand for labor across different occupations.

大家好，我的朋友们。今天是8月10日，欢迎收听本周市场周报。这过去的一周真是令人兴奋，以至于我们在周一紧急制作了一期播客。有时情况相当吓人，但现在一周过去了，回头一看，我们不得不问，这一切是不是像一场梦？今天，我们将谈论三件事。首先，总结一下这过去一周发生了什么。其次，讨论一下市场如何吓得日本央行放弃了加息计划。最后，看看纽约联邦储备银行的一些新研究，这些研究表明，疫情后的劳动力市场结构确实发生了变化，尤其是在内部迁移和不同职业的劳动力需求方面。

Okay, starting with price action. So just to summarize, in case you've been living under a rock, on Monday we had a tremendous crash in the Japanese stock market. The decay was down 12%. Now 12 big number. This is not a penny stock. It is their stock market index. Now can you imagine what the world would feel like if we had a 12% crash in the S&P 500? At the same time, we saw the Japanese yen. I appreciate significantly. Now many market participants looked at this and attributed it to the unwind of the yen carry trade. And that obviously hit global asset prices where the S&P was down 3%. Now in addition to that, we also had a tremendous, tremendous spike in volatility with the Vakes as high as 60. Now that seems to be the unwind of another very popular trade.

好的，首先是关于价格走势的总结。简而言之，假如你最近一直与世隔绝的话，星期一日本股市经历了一场巨大的崩盘，跌幅达到了12%。12%是一个非常大的数字，这不是某只小盘股，而是整个日本股市指数。你可以想象一下，如果标普500指数下跌12%，全世界会是什么反应吗？ 与此同时，日本日元显著升值。许多市场参与者认为这是日元套利交易平仓导致的。显然，这也对全球资产价格造成了冲击，其中标普500指数下跌了3%。 除此之外，波动率指数也出现了巨大的飙升，VIX指数高达60。看来这是另一种非常流行交易的平仓所导致的波动。

The short vol trade, many good podcasts on that. I recommend the recent one on a lot's with Charlie McGelliet. So all that unwind really did seem to panic the markets. But fast forward to today, it looks like things are actually surprisingly retraced. So looking at the Nikkei, we were down 12% on Monday. But today basically flat on the week, the Japanese yen, appreciated tremendously. But at the end of the week, not much has changed. And looking at the S&P 500, of course, we were down a lot. But now the market basically retraced all those losses. But one corner in the market where the market retains the trauma is in the Vakes. Now volatility spiked tremendously. But it looks like those vol sales came right back and pushed volatility lower. However, we are still comfortably above 20 on the Vakes, which is much higher than last week.

做空波动率交易方面，有很多不错的播客。我推荐最近一期，Charlie McGelliet 讨论了很多相关内容。所有这些平仓操作似乎真的让市场感到恐慌。但快进到今天，情况看起来竟然出乎意料地恢复了。来看一下日经指数，周一我们下跌了12%。但今天基本上整个周来看是持平的。日元大幅升值，但到周末时，变化不大。再看一下标普500指数，当然我们之前跌了不少，但现在市场基本已经收复了所有失地。不过在市场的一个角落，市场依然保留了创伤，那就是波动率指数（VIX）。波动率曾大幅飙升，但看起来那些波动率的卖单反而又回来了，把波动率压了下去。不过，我们仍然在VIX上维持在20以上，比上周高得多。

So there are some places in the market that have not fully recovered. But perhaps over time, as we see usually in these spikes in volatility, we'd have more ball sellers, market purchases become more complacent. And that could go back down. Now it seems like there are a couple of things this past week that calm the market about con market participants. So the first is that US data continues to be totally OK. It seems like part of the reason for the scare, it was basically a growth scare. Market participants saw that the unemployment data from last Friday was not as good as expected. In fact, we saw a large spike in the unemployment rate.

市场上有些地方还没有完全恢复。但可能随着时间的推移，正如我们通常在这些波动中的高峰期看到的那样，我们会有更多的卖出者，市场购买会变得更为自满。这可能会使市场恢复平静。现在看来，这周有几件事情让市场参与者冷静下来。首先是美国的数据依然不错。看起来这次的恐慌部分原因是经济增长的担忧。市场参与者发现上周五的失业数据没有预期的那么好，事实上，我们看到失业率出现了大幅上升。

Now many people are looking at this and extrapolating towards a recession. And the market is very afraid of a recession. But this week, again, we got data. Well, it's kind of summarized in the Atlanta Fed's GDP now, which continues to show a very healthy above trend growth in the economy. Secondly, we also got labor market data, the initial unemployment claims that were better than expected. And you know, a notable decline from last week. And that seemed to calm markets a little bit as well. Now, like I mentioned on Monday, we are probably in a chociera higher volatility regime. And so while we bounce this week, and maybe we'll continue to bounce, I think things are a little more cloudy, cloudy than they were, say just a week ago.

现在，许多人看到这些情况并推测可能会出现经济衰退。市场非常害怕经济衰退。但是，本周我们又得到了数据。比如，亚特兰大联储的GDP数据继续显示经济健康且高于趋势增速。其次，我们还得到了劳动力市场数据，首次申请失业救济人数比预期要好，而且相比上周有明显下降，这也让市场稍微安心了一些。正如我在周一提到的，我们可能处于一个波动性较高的时期。所以尽管本周市场反弹了，也可能会继续反弹，但形势比一周前更加不明朗。

So let's see what happened. Let's see what will happen. Now, the other thing that seem to calm markets a bit is our next topic. And that is the apparent pivot by the Bank of Japan. So this past week, obviously, tremendous volatility in the markets centered on Japan. Now, just last week, the Bank of Japan held their monetary policy meeting, and they made a couple big decisions. First, of course, they hiked rates to 0.25%. Sounds not a lot, just barely above 0.0. But remember, Japan has been in negative rates for a long time, only recently went to 0. And now they're hiking to positive. The other thing that the Bank of Japan did was they announced quantitative tightening. So we all know the Bank of Japan buys an enormous amount of Japanese government bonds. So what they decided to do was to reduce their monthly purchases. That in fact is quantitative tightening because that means that their redemptions, so the amount of their bond holdings that mature, is going to be greater than the amount that they reinvest each month, resulting in a shrinking of their balance sheet.

让我们看看发生了什么，也看看将会发生什么。现在，另一个似乎让市场稍微平静下来的因素是我们的下一个话题，那就是日本央行明显的政策转向。就在过去一周，市场围绕日本出现了巨大的波动。上周，日本央行召开了货币政策会议，做出了几项重大决定。首先，当然是将利率提高到0.25%。听起来不多，仅仅比0.0略高一点，但要记住，日本长期处于负利率，直到最近才升至0，现在又提高到了正值。日本央行做的另一件事是宣布量化紧缩。众所周知，日本央行购买了大量的日本政府债券。他们决定减少每月的购债量。这实际上就是量化紧缩，因为这意味着他们债券持有到期的赎回量将大于每月的再投资量，从而导致他们的资产负债表缩减。

Now, this was interpreted as a hawkish signal from the markets. And Bank of Japan governor, WEDO, also seemed to make hawkish noises. Now, of course, things obviously changed because when you see your stock market absolutely plummet by 12% in a day, you got to think that maybe that's not a good thing. And listen, if you are the prime minister or something like that, this is a financial stability, and ultimately an election concern. So we have this other guy from the Bank of Japan come out and give speeds. Who is that this guy? Well, you know, let's take a look. Now, if you look at the website, you will see that this Uchida guy is a deputy governor, literally right next to Governor WEDO.

现在，这被市场解读为一个鹰派信号。日本银行行长WEDO似乎也发出了鹰派言论。不过，当你看到股市一天暴跌12%，显然情况发生了变化，你不得不认为这可能不是一件好事。而且，如果你是首相或类似职位，这涉及到金融稳定，最终还关系到选举。所以，日本银行的另一位高层出来发表了讲话。这个人是谁呢？好吧，让我们来看一看。如果你查看官网，你会发现这个叫Uchida的人是副行长，就在行长WEDO的旁边。

So it seems like an important person. So it came out in a given speech and the Bank of Japan is very courteous. They translate their speeches into English. Of course, they know that being a major central bank, being a big country, their actions are regarded by our scene by market participants throughout the world. And so they want to make sure that market participants understand what they're saying. Now, in this speech, you know, governor, Deputy Governor, Uchida does boilerplate stuff. But one thing that jumped out to me as I go through this is that, well, first, let's look at the structure of this.

所以，这似乎是一个重要人物。发表了一次特定的演讲，而日本央行非常礼貌，他们把演讲翻译成英语。当然，他们知道作为一个主要的中央银行，一个大国，他们的行动被全球市场参与者所关注。因此，他们想确保市场参与者理解他们在说什么。现在，在这个演讲中，你知道，副行长内田讲了一些惯例性的内容。但有一件事在我阅读时特别引起了我的注意。首先，我们来看看这个结构。

You have big paragraph, big paragraph, and then you have this very, very small paragraph that seems to be highlighted. And in that big, in that small paragraph, Dr. Uchida is strongly suggesting that, you know, he's happy with rates as they currently are. Now, after the BOJ meeting last week, the expectation for the market was that the Bank of Japan would again hike in October. Now, Governor, Deputy Governor, Uchida seems to be suggesting in his speech that, you know, we were saying this was going to happen, but look, a couple of things have happened. First, of course, our outlook was conditioned on a whole bunch of stuff.

你有一个大段落、一个大段落，还有一个非常非常小的段落，似乎被突出了。在这个小段落中，内田博士强烈建议，他对当前的利率感到满意。现在，在上周日本央行会议之后，市场预期日本央行将在十月再次加息。但副行长内田在他的讲话中似乎在暗示，我们曾说这个会发生，但看看，有几件事情发生了。首先，当然，我们的预期是基于很多因素的。

And now circumstances have changed. We have tremendous volatility. And that matters. The second thing that he mentioned was that part of the reason why we wanted to hike was because the yen was very weak. And that was leading to a higher higher inflation domestically. And that was causing problems for us. Now, after this massive appreciation of the yen this past week, you know, it seems like that that rationale is not that's not there anymore. So, you know, we don't really have to hike in October. And the markets, of course, knew this even before he spoke.

现在情况已经发生了变化。我们正面临巨大的波动性，这很重要。第二点，他提到我们想要加息的部分原因是日元非常疲软。这导致了国内更高的通货膨胀，对我们造成了问题。然而，经过上周日元的大幅升值，这个理由似乎已经不存在了。所以，我们确实不需要在十月份加息了。当然，市场在他讲话之前就已经知道这一点了。

If you look at the two year Japanese government bond yields, in response to the panic on Monday, they already priced out the rate hike in October. Now, Governor, Deputy Governor, Uchida speech, of course, was greeted by the market with enthusiasm. After the speech, you can see the Japanese yet rapidly depreciate and the decay surge. So, the markets clearly interpreted the speech as some sent a pivot by the Bank of Japan, whereas they were going to hike, they were being hawkish.

如果你看看两年期的日本政府债券收益率，周一的市场恐慌反应已经导致收益率不再预期10月加息了。现在，央行行长、副行长和内田真一的讲话当然受到了市场的热烈欢迎。讲话之后，你会看到日元迅速贬值，而债券收益率则飙升。所以，市场显然将这一讲话解读为日本央行的政策转向，之前预计他们会加息并采取强硬态度。

Now, they are not anymore. And I understand there are people on the internet who see this differently, but it seems clear to me and the market as well. One other thing that I would note is that I've noticed that when policymakers speak to the public, foreign power sleepmakers speak to the public, they are often very blunt. This is because they understand that many people who listen to them don't speak their language, and they want to be as clear as possible. For example, ECB President Lagarde, when she goes and she talks, is actually super blunt, I recall, when the ECB was hiking rates, they were very afraid that the market would price in too early a cutting cycle.

现在情况已经不同了。我明白网上有些人持不同的看法，但对我和市场来说，这一点已经非常明确了。另外，我还注意到，当政策制定者对公众讲话时，外国政府的发言人也常常非常直白。这是因为他们明白，很多听众并不说他们的语言，因此他们希望表达得尽可能清楚。例如，欧洲央行行长拉加德在发言时，讲话非常直接。我记得，当欧洲央行加息时，他们非常担心市场会过早预期降息周期的到来。

So, Madame Lagarde would always go on say, you can say, guys, no pivot. All right, by the way, guys, no pivot. So, this is basically the troubles of commuting to an audience that doesn't speak your language. So, again, when they speak to foreigners, totally blunt. So, maybe there's something secret in the speech in Japanese that suggests otherwise, but as far as I read in English, and this course document was intended to an English speaking audience, it seems like the Bank of Japan is backing down on their hawkish trajectory in the market like that.

所以，拉加德夫人总是会说，你们可以说，伙计们，没有转向。对，顺便说一句，伙计们，没有转向。所以，这基本上就是向不讲你语言的观众传达信息的难处。因此，当他们对外国人讲话时，通常会非常直白。所以，也许在日文讲话中有暗示其他情况的内容，但就我所读到的英文部分而言，而这本来就是给说英语的观众看的文档，看起来日本银行在市场上的强硬路线有所放缓。

So, that's reducing a bit of pressure on the market. And in the future, if things calm down, if data changes, maybe they will continue on their hiking trajectory. But at the moment, it looks like that's easily on pause. Okay, now, the last thing that I want to talk about is this interesting data from the New York Fed about the post-pandemic structure of the labor market. So, one thing you'll notice, I can't think many of us have noticed over the past few years, is that the pandemic resulted in tremendous internal migration. Now, this is, this can be seen in this cool graph from the US Census Bureau showing that, you know, if you look at the dots, tremendous movement out of New York in California into states like Florida, Texas, basically from the huge megacities to medium-sized cities.

所以，这在一定程度上减轻了市场的压力。而在未来，如果情况有所缓解，数据发生变化，他们可能会继续加息的进程。但目前看来，这个进程暂时是中止的。好了，现在我想谈谈的最后一个问题是来自纽约联储关于后疫情时代劳动市场结构的一些有趣数据。过去几年中，我想很多人都注意到，疫情导致了大规模的内部迁移。你可以从美国人口普查局的这个有趣图表中看到这一点，图上的点显示了大量人口从纽约和加州迁移到佛罗里达、德克萨斯等州，基本上是从大城市迁移到中等城市。

Now, what the New York Fed has done is that they've looked at job postings over the past few years, and noticed that this migration trend actually also structurally changed the demand for labor by occupation. So, looking at, so what they did was they looked at job postings, online job postings, millions of them, and they noticed something really interesting. Well, first off, what they've noticed is that in the past, the megacities like New York would have a large proportion of job postings. Cities were, big cities were where the jobs were.

纽约联邦储备银行最近做了一项研究，他们查看了过去几年的招聘信息，发现了一个有趣的现象。这些移民趋势实际上也从结构上改变了按职业划分的劳动力需求。他们查看了数百万条在线招聘信息，注意到了一些非常有趣的事情。首先，他们发现，过去像纽约这样的大城市在招聘信息中占有很大比例。大城市过去一直是工作的集中地。

Now, post-pandemic though, you can see that there's been a steady shift where the proportion of jobs in the megacities has been declining, but the proportion of jobs in medium-sized cities has been rising. And in fact, this trend seemed to have slightly began even before the pandemic, but the pandemic accelerated everything. So, what that seems to suggest is that, you know, more and more people, perhaps because they can remove, move, because they can work remotely there, moving elsewhere, maybe taking their jobs with them, or maybe it's simply a lifestyle choice where they feel like they can afford a home in a medium-sized city, whereas it's very difficult to afford a home, say, in Los Angeles.

现在，在疫情之后，你可以看到一个明显的变化，大城市中的工作比例在不断下降，而中等城市的工作比例在上升。事实上，这一趋势似乎在疫情之前就已经开始了，但疫情加速了这一切。这似乎表明，越来越多的人，可能因为可以远程工作而搬到其他地方，或者这只是因为他们觉得在中等城市可以负担得起一个家，而在像洛杉矶这样的城市买房非常困难。

Now, in line with this though, they've also noticed that the researchers have also noticed a very interesting shift in the types of jobs posted. Now, looking at this graph, you can see that there's been a steady decline in the demand for occupations and, say, in tech and finance over the past few years, but a very strong increase in the demand for things like healthcare. Again, that's a structural shift in how the world works. Now, they do something super interesting in that they cross-reference these two charts. Again, on the x-axis, you can see occupations on the y-axis, you can see size of the city, and then they color-coded by showing you where among this grid, you have increases in jobs and where on this grid, you have decreases in jobs.

现在，按照这个思路，他们还注意到研究人员发现了一种非常有趣的职位发布趋势的变化。现在，看看这张图表，你可以看到过去几年里，科技和金融领域的职位需求在稳步下降，但对医疗保健等工作的需求却急剧增加。这再次表明了全球运作方式的结构性转变。接下来，他们做了一件非常有趣的事情，就是交叉参考这两张图表。再次，在x轴上，你可以看到各种职业，在y轴上，你可以看到城市的规模，然后他们通过颜色编码来显示这个网格中的工作增加区域和工作减少区域。

Where the red strongly shows that there is a strong increase and the blue shows a strong cooling of demand. What's super interesting in this is that they're showing that there is really a significant decline in demand for tech work, stuff like that, computational work in big cities throughout the pandemic. You can think of maybe the kind of the collapse of San Francisco, which is in line, of course, with their decline in offices and so forth, but also a surge in demand for things like healthcare and food preparation in medium-sized cities through the pandemic. Now, their interpretation seems to be that as people have migrated out of the big cities and into medium-sized cities, medium-sized cities have surged in their population, and in proportion to the population, you also need more healthcare, you also need more restaurant workers and so forth.

红色强烈显示需求的大幅增长，而蓝色则显示需求的强烈冷却。这其中非常有趣的一点在于，他们展示了在疫情期间，大城市对科技工作、计算工作等需求的显著下降。你可以联想到旧金山的衰落，这当然与办公场所的减少有关。但与此同时，中等城市对医疗保健和食品准备等工作的需求急剧上升。他们的解释是，由于人们从大城市迁移到中等城市，中等城市的人口大幅增加，按人口比例来看，这些地方需要更多的医疗保健服务和餐馆工人等。

That seems to be rewiring the labor market in the US. I would also add, there's probably a demographic element as well as people as boomers age, maybe they are moving to warmer, smaller cities and taking with them their money and of course their need for healthcare. So this seems to suggest an ongoing shift where maybe the growth, the opportunities are in the medium-sized cities going forward rather than the mega cities as they were before. That seems to make sense to me and what I believe as well.

这似乎正在重塑美国的劳动力市场。我还要补充一点，可能还有一个人口统计方面的因素。随着婴儿潮一代变老，或许他们正在搬到气候较温暖的小城市，并带去他们的财富和对医疗服务的需求。所以这似乎表明，今后或许是中等城市在增长和机会方面占据主导地位，而不是以前的大城市。这对我来说是有道理的，也是我所相信的。

Okay, so that's all I prepared for today. Thanks so much for tuning in. Don't forget to like and subscribe and if you're interested in hearing more of my thoughts, check out my blog at fitguy.com. All right, talk to you all next week.

好的，这就是我今天准备的全部内容。非常感谢大家的收看。别忘了点赞和订阅，如果你想了解更多我的看法，请访问我的博客 fitguy.com。好的，那我们下周再见。