top of page

US Treasuries Pushing 5%

Well folks, yesterday was quite the start to this packed week - our short on $NKLA motors, motivated by their CEO’s defrauding of investors, paid off to the tune of 3% by close while the market climbed 77bps by the end of after-hours trading. A few of the trend-setting bulge bracket banks reported earnings, including Goldman Sachs and Bank of America, with the latter of which motivating today’s trade recommendation and the former announcing a fundamental re-organization of their core business segments that sees investment banking combined with trading. Read up on that here and enjoy your 132nd Coachman’s Report!


Markets in Review

The gains are poised to continue today with the Dow, S&P and Nasdaq respectively up 208, 225 and 247 bps in the pre-market today, while the $VIX has continued to hold just above the 30-point level creating a great market environment for day traders. Taking a break from the earnings talk and panning to fixed income markets, yields on the US Treasury curve have sharply been pushed higher recently - with most maturities above 4% and earlier tenors, up to about 3 years trading around the 4.5% mark. While this does outline investors' expectations of future investment opportunities to be more fruitful than before, there is still the problem of partial-inversion - a leading indicator of recession. Lastly, given the 96.7% probability of a 75bp interest rate hike at the November 2nd FOMC meeting, we can be as close to sure as you can be in the markets that we’ll see yields trading between 5 and 6% by the end of the year.


Long: Bank of America Corporation (BAC-NYSE) | Timeline: 2 days

Bank of America Corporation (BAC), which provides banking and financial products and services for consumers and businesses worldwide announced a stellar earnings report yesterday as they continue to benefit from rate hikes in recent months. The company not only beat earnings and revenue estimates by 4.26% and 4.07%, respectively but also reported a net interest margin of 2.06%. (Full Story) Referring to the chart, the stock has had a negative year so far, declining over 30% from an all-time high of $50. That said, a descending broadening wedge has formed as its edged lower - a bullish reversal pattern created by two declining and diverging trend lines, followed by consolidation in the upper level and a breakout into a new channel.


Zooming out...

Boston University Lab Makes Covid 2.0 Researchers at Boston University’s National Emerging Infectious Diseases Labs have created a strain of Covid that has a roughly 80% mortality rate. This new variant consisted of merging the original Wuhan virus with Omicron and managed to kill eight out of ten mice exposed to the virus while also having five times the amount of infectious particles compared to Omicron. Many will wonder why such a thing would take place, especially due to the likely lab leak-related origin of COVID-19, all while Joe Biden continues to extend the public health emergency status of the pandemic. BofA’s Internal Stats Paint Rosy Picture Bank of America reported stellar earnings yesterday and with those amazing earnings came some interesting internal data that may help to paint a picture of the current economic conditions for American consumers. First and foremost, on the earnings call it was stated that customers who began the pandemic with $2k in their bank are now sitting on roughly five times that number. Additionally, people who had between $2k and $10k pre-pandemic now have roughly 3x that number. Moreover, the trustworthiness of consumer credit loans (credit card, residential mortgage, and home equity) have taken a slight dip over the following six months, a slight dip meaning inside of 9 FICO points. However, consumer vehicle loans have actually increased in trustworthiness by 6 points since the third quarter of 2021. In short, the BofA reports signal that the financial health of their average consumer is strong. Both low and medium-sized accounts were able to multiply their savings over the past two and a half years, all while consumer loan aggregates were able to maintain an extremely strong level of trustworthiness. Although, the real question is, will it last?


Making headlines...

Deadly Russian Fighter Jet Crash

  • 13 killed as military jet crashes into apartments in western Russia, state media reports. (Full Video)

Australia and Singapore strike an agreement to achieve net-zero

  • Australian and Singaporean leaders announced Tuesday what they described as a world-first agreement to cooperate in transitioning their economies to net-zero greenhouse gas emissions. (Full Story)

China Recruits British Pilots

  • The U.K. government said on Tuesday it was taking "decisive steps" against a Chinese recruitment effort to bring in former and serving British air force pilots to train its military personnel. (Full Story)

White House Set to Release More Oil

  • The Biden administration is moving toward a release of at least another 10 million to 15 million barrels of oil from the nation’s emergency stockpile in a bid to balance markets and keep gasoline prices from climbing further, according to people familiar with the matter. (Full Story)

Rolls-Royce Unveils its $350,000 Spectre Luxury EV

  • British luxury automaker Rolls-Royce Motorcars finally took the wraps of its most highly anticipated vehicle, the all-electric Spectre coupe at an event at the company’s headquarters in Goodwood, England. (Full Story)


Chart of the Day: 4th worst year for government bonds…


"The best luck of all is the luck you make for yourself."

- Douglas MacArthur


The Coachman's Report - Terms and Conditions

bottom of page