Morgan Stanley: More on MoMO sell-offs and subsequent equity performance
1. As of yesterday’s close, Momentum has posted a -15.9% move lower from its last peak on September 3 (five trading sessions have passed since).

2. Since 1999, there have been 11 instances where Momentum has moved lower by 15% or more in consecutive trading sessions.

3. On…[Read more]

Goldman Sachs:
Jan Hatzius:

1. Beyond September/October, we think the environment will become less supportive for further Fed rate cuts.

2. This is mostly because core PCE inflation will likely turn sharply higher on a year-on-year basis, for two reasons.

3. First, the current year-on-year rate is depressed by outliers to the downside in late…[Read more]

Why did US Banks rally 3.5%?
1. the bank complex traded very well on Mon and led its cyclical peers higher.

2. The fundamental driver for the strength was better-than-feared presentations from mgmt. teams at the Barclays conf.

3. Investors were worried about gloomy mid-Q updates given the trajectory of rates but that didn’t happen. Citigroup, C…[Read more]

Goldman Sachs forecast for NFP: We estimate nonfarm payrolls increased 150k in August … Our forecast reflects a 15-20k boost from Census canvassing activities, but a slower underlying pace of private-sector job gains in part reflecting the return of the trade war. …

We estimate the unemployment rate was unchanged at 3.7%. … We estimate avera…[Read more]

Credit Suisse:
Reasons to be bullish: we are in the “yield-curve inversion sweet spot” for equities right now
The US yield curve inverted (2 year/10 year) on August 14th

1. 75% of the time the market is able to rise in the following 6 months

2. average rise in 6m is 8%.

3. If ever the US yield curve did not work as a recession pre-cursor it is…[Read more]

Marko Kolanovic:
Think employment data will suck…

Weaker employment data stands to have a larger market impact moving forward

we recommend investors purchase SPY September 6th 292 strike puts for $0.94, indicatively