Video summary
The Tiger Financial News Network concludes its September 3rd market update with a focus on the Federal Reserve's potential pause in interest rate hikes, following remarks from Governor Waller that suggested inflation trends are improving and might allow rates to remain steady until the September 16th meeting. While this news initially sparked relief in the broader markets, the reaction was nuanced; although the 10-year Treasury yield did not move significantly, the 2-year yield saw a notable increase as investors digested the new information. This divergence highlights a complex market environment where the immediate sentiment shifted based on the Fed's stance, yet the underlying pressure on long-term borrowing costs remained a critical factor for economic planning.
A central theme of the update is the administration's clear preference for a weaker dollar and lower yields, driven by the need to manage the national debt which has reached 40 trillion dollars. With mortgage rates approaching 7% and the 10-year yield hovering near 4.8%, the Treasury Secretary is actively working to prevent yields from rising further, as such levels would be uncomfortable for the current economic policy. This dynamic creates a headwind for the dollar, which faces downward pressure despite the Federal Reserve's efforts to control inflation, illustrating a tension between monetary policy goals and fiscal realities that could force tough decisions in the near future.
Despite these macroeconomic uncertainties, equity markets showed resilience with major technology and retail stocks posting significant gains as investors adopted a risk-on posture ahead of the upcoming nonfarm payrolls data. The Nasdaq 100 led the charge, with Nvidia rising 1.8%, Microsoft gaining 2.7%, and Walmart climbing 2.2%, reflecting continued confidence in growth sectors even as broader economic indicators fluctuate. This optimism extended to precious metals as well, with gold surging 2.4% and the GDX mining ETF reaching nearly its highest level of the day at 101.49, while the Vix volatility index dropped sharply by 6%, signaling a calm and stable market atmosphere heading into the weekend.
Read the full video transcript
This is T F N N the Tiger Financial News
Network.
T F N N headline news [music] update.
>> Good afternoon, folks. Tommy O'Brien
coming to you live from T F N N 4:00
p.m. Eastern time. We reached the
closing bell and markets rejoicing with
the fact that maybe we don't get that
hike coming down the line September
16th. Fed Governor Waller jumping over
the headline at 8:30 this morning. So he
had a speech his remarks become public
at 8:30 this morning. He indicates that
he'll support holding rates steady. Wait
a second. What happened to Warsh?
Right? Well, Waller says, "No, we might
be okay here. Inflation's not as bad as
maybe the numbers show. The trends are
actually on our side. What's the harm in
waiting a meeting?"
And you get a move on the 10-year, but
surprisingly you actually gave it up.
Okay, so the 10-year's not moving, but
you know what did move, folks? The
2-year.
Yeah. So we get higher price from where
we were. You give up some of that action
though. You do give up some of that
action, but the dollar doesn't give it
up, man.
Okay, the dollar is just facing pressure
to the downside, folks. You know, I keep
harping on it. But this
headwind that the dollar's facing right
now on a daily basis,
you have a Federal Reserve that the
market's not quite sure they're going to
have the conviction to get inflation
under control, and you have a Treasury
Secretary
that is going to use dollars to keep our
longer-term yields in check. And yeah, I
would agree EKS as you said in the den.
This administration
is all about a weak dollar. So when I
throw in the fact that the Treasury's
definitely on board, okay? There's no
way they want yields near where we are
right now. We got mortgage rates
approaching 7%. We have a 10-year yield,
okay? Right now we were at approaching
almost 4.8% yesterday. We're at 4.77.
We are at 4.77 right now on the tenure.
Okay, we're approaching a boundary that
this administration is not comfortable
with and they have some tough decisions.
It's not all on them. Okay, we're at 40
trillion dollars. The Treasury's got to
make a decision as we have a tenure at
4.77.
We have a 30-year pushing higher.
Okay, in yield that is pushing higher as
we're at 108.18 right now. You got a bit
of a reprieve, but yeah, you better
believe it. So dollars under pressure.
Nasdaq 100 we go risk on. Nvidia up 1.8%
Microsoft up 2.7% even Walmart up 2.2
and gold saving the best for last. Gold
up 2.4%
okay? And as I was saying Tim, you got
the GDX almost at the tick high folks.
Look at it. We've run higher right into
the close at 101.49 up nearly 4% and the
Vix
down 6%. Remember nonfarm payrolls 8:30
in the morning. I'll see you at 9:00 for
the morning market kickoff folks. Have a
great night folks. Thanks so much.