Pre-Market Report – Thursday 10 September - SPI Futures down 88

0:00Good morning everybody, this is Marcus today, pre-market podcast coming out of you on Thursday, 10th of September. And ASX 200 yesterday, down just nine points. Won't be the case today. The spy futures are down 88 points. That comes on the back of the Dow Jones down 400 points. The NASDAQ down 0.64% the S&P 500 down 0.48%. And the VIX volatility index just creeping half of the second day up 4.7% at 16.46. Themes for the day, the most important one probably, is the Scott Bessent Bond buyback backfires. The announced last night, I thought it was going to be one PMR time today, I think it

1:00was 1am last night. He announced the continuing buyback of 10 and 30-year bonds in the US. And he's already highlighted that it would double from 2 billion to 4 billion. There was speculation about 5 to 6 billion. And he's announced 6 billion dollars worth of bond buying. And the bond market has done exactly the opposite of what was intended the 30-year bond yield up 4.6 basis points. It was up 6 basis points at one point. The 10-year up 4.9 basis points, 2-year up 4.2. And some of the European bonds took it even worse. The Euro 10-year up 8 basis points, UK 10-year up 9 basis points, German 10-year up 8 basis points. The European bonds are multi-decade highs in just about every western bond market. And the idea that Bessent is going to be able to control the bond market is being met

2:02with derision by most strategists. One says he is doing nothing more than papering over a problem. Buybacks don't touch the real driver of higher yields, which of course is US debt. And the need to issue now is something like a hundred billion dollars worth of bonds a month just to pay the interest bill. The other issue of course is inflation. Fed at the moment by the oil price, I'll come to that in a minute. And Bessent's suggestion that the issue is liquidity in the bond market and the buybacks are intended to improve liquidity is just a red herring. Doyscher Bank says Treasury, US Treasury, Bessent in other words, has built a monster. It now has to keep feeding. If Bessent now backs off from buying bonds, it's going to backfire, which it already has overnight. Interestingly, on the back of those European bond market sell-offs, bond yields rising. The French market down 1.94% overnight, the German market down 1.7% overnight, UK down 1.3%

3:08and the stocks 600 index 600 biggest stocks in Europe down 1.41%. So Bessent is backing himself into a corner. His comments as well about intervening in the yen and that I am the market is also provoking bond and currency market participants to take him on. And as I've said a few times, I think he is better to just leave it all alone and let the markets be the markets. I'm trying to take it on. It's probably going to make the problem worse, not better. Anyway, better side. The bond market sold off last night and that's dragged on equities. The other issue overnight is that the oil prices spiking again. It's gone over $100, Brent hit $101. As a bit going on, it's the seventh month of the war. No ceasefire talks are underway. And the US and Iran are trading strikes. Iran say they've rebuilt their missile stockpiles and have enough for a lengthy fight and will

4:12hit back harder if the US attacks its territory. The US has destroyed five Iranian tankers, keeps showing the footage of that. That's after Iran targeted a warship. Iran has apparently fired 20 missiles as well as Jordan airbase. And the hooties are back targeting energy facilities in Saudi Arabia. Arabia, sorry. Trump has said that the war will end after the midterms, which effectively is saying don't make it a political issue. Ahead of the midterms, he's speaking in a Texas rally. The political hype is starting. We've got two months of this ahead of the midterms. Inflation in Iran, by the way, I believe is running near 90% and the Iranian rear. The missile is falling over on my screens. I had it at zero, which it obviously isn't, but I think the markets are struggling to keep up. So oil price up 65% this year hitting 101 trend is higher.

5:14Goldman Sachs is analysts getting a lot of coverage on Bloomberg for saying the oil price is going to $120 and one broker is telling us that the only reason the oil price isn't it. $200 is because of these dark crossings. There is a dark fleet cushioning the market at the moment. The other issue pushing the oil price up is China is apparently pushing its crude purchases higher this month. And it's not just the oil price. The European natural gas prices at the higher since 2023. So bond buying and Middle East war and the oil price, the main issue is this morning on the back of all that we've got hard assets doing okay. Gold up half a percent, silver up 2.3%. That's Bitcoin doing down half a percent today. Aussie dollars sitting at 72.19. Metal prices slightly high. US copper up 1.1%. I know a price doing nothing.

6:15The Australian bank sector is now down 3% in two days. Over 3% in fact, resources sector yesterday was up 1.65%. Bank sector was down 1.41. So our banks have reversed from their recent few day rally. Not enjoying higher bond yields, not enjoying the narrative about the housing market either. And not enjoying the cascading number of strategists predicting a September and certainly a November rate rise in Australia after a couple of RBA governors yesterday. I think it was a day before actually. Said things like we have more to do on inflation. Still above target. Inflation's persistent. The pressure on inflation has failed to cool. We may need to raise rates. Inflation's too high. We may need to respond. La la la. Westpac was the last major bank holding out for no rate rises this year. They now expect a November rate rise. Goldman Sachs expects a September rate rise.

7:17Copper was all the go yesterday. We probably saw I think BHP was at what 3.2% or something yesterday. It's driven by the copper price. The wire ETF which represents major global copper stocks. That was up 4.17% yesterday. So copper flying US copper price at 1.1% today. What else? We have Apple launching its fold foldable phone plus other new phones. Ear buds. Apple share price down 0.3% despite the foldable phone. Which comes in. They've tried it very hard to get it under US$2000. So it's going to cost about $3.500 here. And if you put a bit more memory in, it's going to be over $5,000 in Australia. Meta was up 6.6% overnight. It has bottomed on the settlement a few days ago. And risen from 5.25 to 653 in a week since that court case was settled with most US states.

8:26And it has launched the new Muse AI Shopping and Email agent. That's got it up 6.6% overnight. What else? Gold stocks generally hire overnight copper stocks. Dispoint of copper price up a little bit. Mostly paused uranium stocks down. All the software stocks lower overnight. Shopify down 5.5% again. This game of ping pong between which tech-based ETFs going to go up today continues. Software ETF down 0.8%. Sox semiconductor ETF up 0.7%. Magnificent 7 up 0.4. Magnificent 493 down half a percent. JP Morgan almost a $1 trillion stock. Lots of chatter about the Anthropic IPO which is likely before the end of the year looks like they'll be raising about $100 billion which gives it a $2 billion valuation. Morgan Stanley Goldman hoping to handle it.

9:26If you remember when SpaceX listed there was a sell down in tech stocks in the week ahead of the IPO as funds sold stocks in order to fund the SpaceX IPO. SpaceX expect the same thing for Anthropic. No one has a date yet but it's thought likely to be November. Amazingly the Australian property market the sector is down 15% this year is getting international coverage. Thanks to the collapse of the Bethler group the main stock affected is CNI in our market. CNI is down from $2.50 to $1.25. Recently hit a low of 109 and that's all in the last year. It's also not helping sentiment towards private credit which was all the frenzy last year. And that's about it. Coming up we've got USPPI tonight CPI tomorrow night Friday night 10 30 pm fed meeting September 16.

10:27That'll be Wednesday morning our time is it? We've got a few extra dividends still June no real big ones today. Spark New Zealand perpetual Macmillan Shakespeare 9 network Cogan. Tomorrow we've got Wise Tech car group Clean Away and a few others. Next week what have we got? Corus Quantus. Gold stocks flight center. White center still paying dividends. Yes they are. In fact a 3.8% yield on that one dividend by the looks of it. And here's a lesson for all those of you who can't resist a falling share price when corporate travel came back on the market recently. Having been suspended for a year at $16.07 on the first day it came back on. And at $3 everybody bought it up to $3.40 it closed the day at $232.00 and has kept

11:31falling down to $2.00 now. Just to point out I did write about it in the stock discussion group on Facebook and in the newsletter that some big institutions who are faced with a stock that has lost 80% that's no longer in their benchmark are natural sellers and the liquidity isn't there for them to sell their holdings over a one day period so it's going to get relentlessly dripped out for a period of time so unless there's somebody there to soak it all up which I'm afraid retail investors are not big enough to soak up all the institutional stock you'd need a bidder to come along or someone to build a stake. Without that the price was always and is always going to drift lower so next time you see a stock that falls 80% just have a quick think before you go and trade it because if you'd bought it on realist at $3 you've now lost 50% in four days just looking for some broker

12:32research here. There is any on corporate travel management Ctd I have Morgan Stanley with a $2.60 target price and that's the only research I can see. Right that's about it that was rather a lot. So those of you following Henry going to have a look at the Henry's take section yesterday unfortunately Marcus has taken over, Marcus's take yesterday I sold six stocks that have got exhausted narratives that are sitting on losses and are trending lower and we're all small holdings so six stocks sold in our small caps portfolio. The other thing I am asked to tell you is that on the website at the moment we have a member survey at the top of the newsletter we've got about 600 replies so far it helps us create a better product for you. So please go and fill out the Marcus today member survey that's about it we'll be back with the members podcast midday spy futures down 88 and let's see how we got.