Bitcoin Consolidates After Strong August — Market Talk

1408 ET - After having a breakout August, bitcoin has been quiet so far in September. Bitcoin has lingered around $76,500 to $79,500, says analysts with Bitifinex in a note. That's important, because that range sits above what's referred to as the "true market mean" — a key source of support for bitcoin at $76,350. Bitcoin has an average return of -2.95% in September, says Bitfinex, forecasting that bitcoin may stay quiet in September before seeing a breakout to close out the rest of the year. Bitcoin slips 0.1% to $77,326, Ethereum falls 1.1% to $2,393, XRP is down 1.2% to $1.34, and solana is down 0.8% to $99.24. ([email protected])1348 ET - The time is ripe to deploy excess cash, Truist's Chip Hughey says, as bond yields rise while money market funds hold more than $8 trillion, according to the St. Louis Fed. Hughey says expectations of a Fed hike have pushed short-term yields "significantly above" the fed funds rate for the first time in years. He also likes exposure to three-to-10-year bond yields and prefers U.S. fixed income over international alternatives. As for corporate bonds, spreads are tight, but "the reality is that the yields that investment grade and high yield corporates are generating is very elevated on an absolute basis." ([email protected]; @ptrevisani)1345 ET - Volatility has become the new normal in bond markets, due to geopolitical tensions and less forward guidance from the Fed, Truist's Chip Hughey says. Treasury yields cool down from overnight highs, but remain elevated, with the 10-year trading at 4.798%. Hughey says the decline was caused by a brief "flight to quality." On the other hand, high yields make bonds appealing. "Over the next 12 months, if the 10-year yield were to rise to 5.25%, that bond would actually still produce a positive total return," he says. However, he expects yields to decline alongside oil prices once traffic in the Strait of Hormuz normalizes. ([email protected]; @ptrevisani)1308 ET - Diesel prices are back on the rise as the Middle East conflict flares up, sending refining margins for the fuel to record levels. "While Iran and the logistical constraints for shipping in the Middle East are primarily in focus, the diesel narrative continues to also be written by the war in Ukraine and the destruction of Russian refinery infrastructure," says Matt Muenster, chief economist at transportation technology firm Breakthrough. While Russia bans diesel exports, the U.S. has been exporting record amounts of the fuel. "These dynamics and the expected demand growth from U.S. agricultural production through harvest season will keep diesel supported at exceptionally high prices this fall," Muenster says. "Continued pressure on diesel prices reinforces expectations that freight transportation costs will keep contributing to broader inflation across the economy." ([email protected])1248 ET - Pending home sales declined year-over-year in August for the first time since last November, Realtor.com says. However, summer delistings are 12.6% below last year's pace, with no notable spike in July or August. The national median list price was $424,500 in August, down 1% from July and 1.3% from a year earlier. While this marked the 10th consecutive month of annual list-price declines, the pace of the decline was roughly half of July's 2.4% drop, Realtor.com says. And 20.4% of active listings had a price reduction, up 0.4 percentage points from July. Higher mortgage rates are meeting a point in the calendar when activity typically slows, and buyers appear to be responding more selectively, Realtor.com says. The key question is whether this is a typical late-summer pause or the start of more persistent softness, according to Realtor.com. ([email protected])1248 ET - SpaceX's vertical integration gives it an advantage in deploying and supplying computing power, Oppenheimer analysts write in a note, lifting their price target to $280 from $250. "We think SPCX will be a winner of the near-term compute shortage, as it has the ability to bring on infrastructure faster than anyone else, and is using this infrastructure and its data to improve its own models faster than anyone else," they write. Not only can SpaceX use this compute itself, but it rents out infrastructure to other firms, gaining 50 cents for each dollar of revenue its tenants receive based on the analysts' analysis. "As demand for SPCX models accelerates, SPCX captures the leasing and frontier lab revenues as a vertically integrated owner," the analysts write. "No other company can do this, in our opinion. ([email protected])1215 ET - Wedbush Securities analysts forecast Uber Technologies' plans to cut 10% of its workforce could lead to about $1.75 billion in total run rate cost savings. "That said, we expect to see all or most of the savings reinvested, and less flowing through to the bottom line," the analysts say. They expect much of the savings will be put toward the company's growth initiatives. "In our view, this announcement strengthens our conviction in Uber's capacity to drive growth while maintaining its margin expansion trajectory," they say. ([email protected])1042 ET - Capital Economics says the Bank of Canada's stand-pat decision has a hawkish tilt due to its concern how the upside risks to inflation have increased due to the prolonged conflict in the Middle East. The firm's economist Stephen Brown adds the last paragraph removed a suggestion that the rate level was appropriate, and instead notes officials standby ready to adjust policy as needed. ([email protected]; @paulvieira)1027 ET - Home sales jumped 9% year over year in San Francisco in July, Redfin says, while sales fell 9% in Seattle. Two of America's leading tech hubs, their markets have often responded to the same forces: tech hiring, stock-market swings, remote work and mortgage rates. But San Francisco is backed by AI wealth that's heavily concentrated in that city, something Seattle lacks. San Francisco's median home-sale price jumped 6% in July to $1.6 million. Seattle's median sale price declined 4% to $809,000. Homes for sale fell 18% year over year in San Francisco, while inventory rose 17% in Seattle. The typical home that sold in San Francisco in July did so in 20 days, 3 days faster than last year. In Seattle, the typical home sold in 24 days, 4 days longer. ([email protected])1017 ET - The typical U.S. home located in a highly rated school zone costs $580,000, Redfin says. That is 35% more than $430,000 for the typical overall home. A household would need to earn $159,157 to afford a home in a highly rated school zone. That's roughly $41,000 more than the $117,995 needed to afford the typical overall home. Both are higher than the median U.S. income of $87,599, but the gap is wider for a buyer looking to purchase a home in a highly rated school zone. A median-earning household buying a home in a highly rated school zone would need to spend 54.5% of their income on housing, compared with 40.4% for the typical home. The premium benefits homeowners selling in highly rated school zones, where homes command higher prices on average. ([email protected])1006 ET - The Treasury selloff may have less to do with the U.S. fiscal deficit than analysts suppose. Apollo's Torsten Slok says in a note that the New York Fed's measure of how much yield investors demand to hold 10-year government debt, or term premium, "has moved sideways over the past 12 months," indicating that "there has been no deterioration over the past year in how the market prices US fiscal sustainability or Fed credibility." Slok adds that the U.S. term premium is lower than Japan's or Germany's. He concludes that, with the Fed outlook changing from expected cuts to potential hikes "it is not surprising that long rates are higher." ([email protected]; @ptrevisani)1002 ET - Brown-Forman is counting on Jack Daniel's Tennessee Blackberry whiskey to buoy its business as consumers are pulling back on alcohol consumption. Sales of the beverage partially offset declines of Jack Daniel's Tennessee Honey and Gentleman Jack, generating flat overall whiskey revenue during the most recent quarter. Brown-Forman has been expanding the brand to launch across international markets. "Jack Daniel's Tennessee Blackberry helped offset pressures elsewhere in the business and demonstrates our ability to create new opportunities for growth even in a challenging operating environment," Chief Executive Lawson Whiting says in the earnings release. ([email protected])