U.S. Indexes closed higher on Friday, with gains broad-based, although the Dow and Russell outperformed while the NASDAQ 100 slightly lagged. Breadth was strong, with the equal-weight S&P 500 rising around 0.6%, while sectors were also predominantly firmer. Materials, Health Care and Consumer Discretionary led the gains. Utilities were the clear laggard, with notable pressure in sector heavyweights NEE, SO, DUK and AEP, likely weighed on by the continued rise in Treasury yields despite the Treasury’s recent announcement of increased long-end buybacks, while some may be taking data centre-related profits. The Treasury curve bear flattened on Friday, with front-end yields leading the move higher. Long-end yields returned above levels seen before the Treasury’s buyback announcement, although the increased focus on long-end liquidity may be helping limit the relative move higher. Treasury raised the maximum size of long-end liquidity-support buybacks from USD 2 billion to “at least” USD 4 billion, while Bessent subsequently acknowledged a signalling element to the move and suggested long-end operations could exceed USD 4 billion. In otherwise quiet trade, this may be leaving the path of least resistance towards some flattening following the pronounced recent steepening. In FX, the Dollar extended its recent decline despite higher US yields, while the Antipodeans outperformed amid hopes for additional Chinese fiscal stimulus and the rally in metals prices. In commodities, crude settled higher but gave back the gains post-settlement. Geopolitical messaging was mixed, with Iranian President Pezeshkian speaking in favour of ending the war while Iran remained in a position of strength, although the Iranian Navy commander separately warned that a “historic lesson” was coming for the enemy. Gold and Silver extended their recent rally despite higher Treasury yields, while broader metals were also supported by hopes for additional Chinese stimulus. Attention thist week turns to Treasury Secretary Bessent announcing Iranian sanctions on Monday, the US PCE report, BLS prelim benchmark revisions, and Fed Chair Warsh at Jackson Hole. Manufacturing PMI unexpectedly declined to 53.2 in August from the expected and prior 53.9. Services surprised to the upside, rising to 56.8 from 54.6 (exp. 54.0). Meanwhile, the composite rose to 56.0 from 54.5. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, wrote that the data for Q3 currently points towards annualised growth approaching 3.0%, accelerating from the 1.5% pace seen in Q2. Positively, he added that “Jobs growth has also shown a welcome revival in August, with employers gaining in confidence as concerns fade over the negative economic impacts of tariffs and the conflict in the Middle East”. Yields rose across the curve on Friday in quiet trade. The curve bear flattened, with front-end yields leading the move higher, while crude prices settled marginally firmer. The Treasury’s actions earlier this week remain at the front of participants’ minds. Traders may be reluctant to push long-end Treasury Futures materially lower given the prospect of further Treasury action; Bessent said on Thursday that the Treasury has a wide toolkit, while also stressing that buybacks could exceed the USD 4bln per-operation maximum announced earlier this week. It is also worth noting that the increased liquidity-support buybacks are focused on the 10-30-year sector, potentially providing greater support to the long end relative to the front end and contributing to Friday’s flattening. Elsewhere, Oil closed flat while Gold surged, ending Friday’s session with a gain of 2.4%.
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For anyone following my Platinum Service it made 305 points on Friday and is now ahead by 2190 points for August after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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