Video summary
The trading day concluded with mixed signals across major indices as the market digested significant news regarding the Treasury's decision to accelerate debt repurchases. While the S&P 500 briefly touched all-time highs before retreating slightly to trade near 7736, and the Nasdaq 100 gave up early gains due to pressure on tech stocks, the Dow Jones Industrial Average managed to climb by 117 points. This divergence was partly driven by a reaction to Federal Reserve minutes suggesting that further rate hikes may be necessary if inflation does not cool, though yields remained relatively stable with the 10-year Treasury note hovering around 4.65%. The market's primary focus, however, shifted dramatically toward the dollar, which weakened significantly following the announcement that the government would buy back its own long-term debt to artificially keep yields low, a move that raised concerns about future currency demand.
The weakening of the U.S. dollar sparked a powerful rally in precious metals and industrial commodities, with gold surging by 3.2% and silver climbing over 3%. Platinum also saw a notable increase of more than 5%, while copper remained flat. This flight to safety and alternative assets was fueled by investor skepticism regarding the sustainability of current debt levels; if the government continues to use its own currency to purchase debt, it may necessitate a weaker dollar to manage debt service costs through inflation. Consequently, gold is viewed as a direct beneficiary of this strategy, offering a hedge against the potential erosion of purchasing power and the artificial suppression of long-term interest rates that could follow such fiscal maneuvers.
In the biotechnology sector, Moderna delivered an extraordinary performance, with shares skyrocketing by 150% after announcing positive results from the final stage of a clinical trial for an mRNA-based cancer therapy. This breakthrough represents the first successful trial of its kind, demonstrating that a personalized vaccine combined with Merck's Keytruda can prevent melanoma recurrence and slow tumor spread more effectively than chemotherapy alone. The treatment involves creating individualized vaccines based on patient biopsies, though widespread public availability is still years away due to the complex manufacturing process required for personalized shots. This news also provided a significant boost to Merck, whose stock rose by 13% as investors anticipated future opportunities to combine their immunotherapy drugs with Moderna's vaccine technology once patent protections expire.
Volatility remained a key theme throughout the session, particularly in the semiconductor and memory chip sectors where Nvidia traded flat after a turbulent open, while Micron and SanDisk experienced declines amidst broader market uncertainty. Despite these fluctuations in specific tech stocks, the overall sentiment was heavily influenced by the macroeconomic narrative surrounding debt management and currency strength. As the day ended, the S&P 500 closed positive for the session, supported by easing yields and a robust gold market, setting the stage for upcoming discussions on institutional ETF strategies that will likely address these shifting dynamics in equity and fixed income markets.
Read the full video transcript
Good afternoon, folks. Tommy O'Brien
coming to you live from T F N N. Thanks
for joining me for the final hour of the
trading day, and we got a bunch of new
stories, folks, coming at you, and it
kicks off with the Treasury. Yeah,
they're going to be buying back more of
our long-term debt. That accelerates
things this morning, and there's your
acceleration on the S&P's when we get
that announcement at 8:30 this morning.
Now, what's remarkable is, okay, the
10-year is pretty much right where we
were when we kicked off the day, but you
got an S&P right now positive by 3/10%
we were as high making a run for those
all-time highs at 7764. You give up some
of those gains. We're currently trading
at 7736,
and yeah, that little volatility there
at 2:00, the market digesting the Fed
minutes. Okay, as Fed officials see in
the need for rate hikes if inflation
does not cool. Now, they're going to get
some more data, right? They got August
data before the September meeting.
Nonetheless, Nasdaq 100, you give up
those early gains, right? Tech stocks
under a bit of pressure today. You're
down by 40 points or about 1/10% right
where we were
coming into that 8:30 announcement from
the Treasury. 29,545,
you got a Dow up 117 points or 2/10%
53,519,
and the Russell. Sometimes those small
caps a little bit more yield sensitive,
right?
They're up by 12 points or 4/10% trading
at 3038.
And as I mentioned, you get over the
yields. So, we're positive by seven
ticks, okay, but we were already in the
green coming into that announcement.
Really, the 10-year has not moved that
much at all, which is surprising. We're
at 4.65%
Now, the market had already eased a bit,
okay, in terms of coming off. We were at
10809
yesterday, right? Pushing about 4.75 on
the 10-year. You came into that
announcement already higher by 14 ticks,
and we just drift up a bit to 10825 4.65
on the 10-year.
The 30-year likes that news, though. It
sure does. Yeah, and you get over to the
yield curve, folks. So, the year the
30-year's up a full point and 10 ticks.
You're at 109.31. You're basically
trading right at 110 right now.
Okay, and you have to take a look at the
yield curve.
And yeah, you know, not a tremendous
amount of movement, you know, on the
except when you go to that very top end.
They had a 20-year auction today. So,
you get nine basis points of movement on
the 20-year, nine basis on the 30-year.
The 10-year was already moving. The
10-year had already moved five basis
points coming into that announcement,
right? All the yields had moved a little
bit. So, you do get a reaction.
But boy, folks, where the reaction is
most pronounced
is the dollar.
Okay? Now, I've been trying to put this
one together fully
in terms of
this was the last Fed meeting.
Okay?
And the last Fed meeting,
the dollar just starts trading lower,
man. It cannot find a bid since then.
And so, what may be happening here,
right? Is that the market's saying,
"Okay,
here's what they're going to do now,
right? That
we're going to repurchase our own debt
to keep yields artificially low.
But who's going to want to hold our
dollars if we're using our own dollars
to buy our own debt to artificially keep
the rates low?
Okay? And, you know, it's undeniable,
right? Yields haven't moved from that
announcement, folks, and we got the
dollar pulling back extremely. And hey,
one of the one of the easiest ways,
okay? It's one of the risks out there
running a debt like we're running right
now.
That debt has to get paid off. We have
debt service numbers. The easiest way to
pay off that debt is through a weakened
dollar. Now, inflation does it, right? A
weaker currency does it cuz you're
paying it back in the same way.
And hey, we'll see where we go from
there. But yeah, that's the headline.
And you better believe that's giving
gold a bid, man. Because if they're just
going to start using the dollar to buy
our own debt back to artificially try
and keep down those longer-term yields,
doubling the guy that what's what's
absolutely remarkable is that they just
came out with the repurchase plan 2
weeks ago.
So, they could have done it then. They
could have done it the next time, but
no. They said, "We got to do it right
now, man. Yields are a problem." And
gold says, "We'll take that. Thank you
very much. We will take that." With gold
up by 3.2%
up 141 bucks 45 62. How about that
acceleration, folks? And the equities,
yeah, you better believe it. Up by 8.6%
right now for the GDX. You got silver up
3.7% 66 39 right now. You jump over to
platinum up by 5.3% 18 26. Quite a run
for platinum up $92 right now. 18 26.
Copper not quite participating. Copper
flat at 6:48 right now. All right, some
of the other stories. How about Moderna?
mRNA. Look at this run, baby. Up 150%.
Okay. And yeah.
It pulled this one over.
Merck's getting a lift, too, cuz it has
to do with their Keytruda, as well.
But yeah.
You're talking about Now, what I I was
talking about this this morning, as
well.
Is that
as they put it here, it's the first
positive final stage trial for any
mRNA-based cancer therapy. And what it
did was it met its main goal
as the vaccine combined with Keytruda,
which is from Merck, prevented melanoma
returning after it was surgically
removed more than just using Keytruda
alone, right?
And it also slowed the spread to new
areas of the body.
So,
you know, the promise of a future there.
And yeah, 150% to the upside. They
always say the example that everyone
always uses, right? when you say you
know if you go short your your losses
are unlimited right I mean that company
could always come out tomorrow if they
have the the cure for cancer. Moderna
does not have the cure for cancer folks
okay but it is remarkable when you type
you know the exuberance and
just to put things in context though
yeah quite a run up in 2021 they pull
back and that's quite a move Moderna up
150% on some positive results for their
okay vaccine combined with Keytruda
which is from Merck and Merck gets the
lift on that news too cuz they're going
to use patent they're going to lose
patent protection on that at some point
and yeah now they can combine it with
potentially that vaccine now the thing
about that vaccine folks is that this is
an individualized vaccine
okay as in they literally
take a biopsy or use right
what your tumor is actually like
and then they have to develop that
vaccine personalized it's a personalized
shot
okay that they then take it takes 6
weeks this trial was 1,100 patients
okay and that vaccine was given every 3
weeks for as many as nine doses
but so they have a long way to go before
this comes out to the public when you
think about you have to actually biopsy
those you know how does this happen in
terms of a large scale but pretty
encouraging results and the market's
reacting today Merck up 13% Moderna up
150%
how's that one for you
we jump over to Nvidia shares there's
some volatility on the open for you
Nvidia
trading right now flat we jump around to
some of the memory stocks yeah these
things man
how's that for volatility on you man 70
bucks on the open 50 bucks on the open
right Moderna excuse me Moderna Micron
down by 1% right now you jump over to
SanDisk SanDisk right now there's some
volatility down by 3.8% right now all
right folks stay tuned We got an S&P up
by 23. We got yields easing a bit and we
got gold pushing higher in a big way.
And when we come back, folks, we're
going to be talking with Sean Edwards
from Direction, Vice President
Institutional ETF Strategist. We're
going to be talking some ETFs, folks.
Always a great segment with Sean. Come
on back.