Mott Capital Management

Stocks were flat ahead of the FOMC, but volatility surged across the board, reflecting investor uncertainty going into the Fed’s rate decision.

The market experienced an unusual day where equities, volatility indices, and correlation measures all rose together, signaling divergence and uncertainty ahead of the Fed meeting. At the same time, tightening liquidity conditions, repo market stress, and overbought stock indicators suggest a fragile environment where risks may soon surface.

Markets enter a critical week with Fed and BOJ meetings, a Treasury cash build, and option expirations all pointing toward tighter liquidity and elevated volatility.

The S&P 500 moved in line with volatility expectations after the CPI report, while liquidity strains from the TGA refill pushed repo rates higher and left equity financing activity subdued.

Oracle’s extraordinary 36% surge fueled early market gains, but broader weakness left major indices mixed as investors looked ahead to tomorrow’s CPI report.

Markets await tomorrow’s PPI report while payroll revisions and Oracle’s surprising after-hours surge highlight shifting dynamics in inflation and tech.

Markets Remained Flat Ahead Of Key Inflation Data And Employment Revisions, While Treasury Yields Slipped And Funding Market Liquidity Showed Signs Of Tightening, As Broadcom Reached Overbought Levels.

Markets are preparing for key inflation reports this week while tightening financial conditions, widening credit spreads, and shifting funding rates raise concerns for risk assets despite equities hitting new highs.

The S&P 500 gained and the VIX fell das traders hedged short term ahead of the NFP report, while liquidity measures signaled tightening financial conditions.

US equities closed higher on late-session buying while bond yields fell after a soft JOLTS report, as narrowing US–Japan spreads highlight diverging rate dynamics.

The S&P 500 stalled near its put wall while global bond yields climbed, signaling potential steepening in the yield curve and renewed volatility ahead.

Markets enter a shortened Labor Day week with critical jobs data, Treasury settlements, and liquidity pressures shaping the outlook for Fed policy and asset prices.

Market liquidity pressures are mounting as reserve balances decline and large Treasury settlements approach, leaving equities vulnerable despite lower volatility.

The S&P 500 closed modestly higher as markets awaited Nvidia earnings, while inflation swaps and the yield curve signaled growing concerns about long-term inflation expectations.

Markets stayed quiet ahead of Nvidia’s earnings, while the yield curve steepened, and Treasury–JGB spreads tightening as bond market signals diverge.

The stock market closed mostly lower with the S&P 500 little changed as Nvidia rose, while inflation swaps climbed and global bond yields signaled pressure for US Treasuries.

Markets rallied briefly as volatility collapsed following Powell’s Jackson Hole speech, but fading event risk quickly capped gains across stocks and bonds.

US equities edged lower while inflation data and bond market signals pointed to reduced prospects for a September Fed rate cut and potential steepening of the Treasury curve.

Markets sold off sharply before staging a rebound, but tomorrow’s $44 billion in Treasury settlements and the depletion of the reverse repo facility could pose another challenge. Narrowing US-Japan yield spreads and shifting currency dynamics, particularly in MXNJPY’s alignment with the S&P 500, highlight rising risks of a broader risk-off move.

The NASDAQ 100 dropped nearly 1.4%, with high-growth names like Palantir hit even harder, in what appears to be a liquidity-driven selloff. With the reverse repo facility depleted and Treasury issuance ramping up, funding stress could build, placing additional pressure on equities in the weeks ahead.

Stocks finished flat in a quiet session, with S&P 500 futures posting their lowest trading volume since early July. Market focus now shifts to Jay Powell’s upcoming Jackson Hole speech, inflation swap patterns, yield curve steepening, and a potential breakout in the USDJPY 5-year forward.

Stocks ended lower Friday as volatility looks set to rise with OPEX behind and Jackson Hole on deck. With liquidity pressures mounting and Fed leadership in flux, markets may soon learn whether the recent rally was fueled by genuine strength or by the hidden liquidity boost of the reverse repo facility.

U.S. stocks ended flat, with the S&P 500 showing little momentum despite rising volatility and correlations ahead of tomorrow’s options expiration. Liquidity continues to tighten as reverse repo balances drop, while Japanese bond yields press resistance levels—raising the possibility of shifts in Treasury–JGB spreads that could trigger a yen carry trade unwind.

Market liquidity is poised to tighten further as Treasury settlements and T-bill issuance push the Treasury General Account toward $850 billion, draining reserves and pressuring funding conditions. At the same time, volatility measures are converging, with the VVIX signaling potential increases in the VIX, as the Dow approaches a key technical breakout level distinct from…

The equity market saw a stronger-than-expected volatility crush today, lifting S&P 500 futures early before momentum stalled at the July 31 level—a full retracement of the August 1 decline. Meanwhile short-term realized volatility increased, and the ongoing liquidity drains from Treasury settlements and reverse repo facility continue…

Tomorrow’s CPI report, coupled with a significant Treasury settlement, will test the market’s increasingly bullish inflation expectations as seen in rising CPI swap pricing. While technicals in inflation markets point higher, several major software names—including ServiceNow, Workday, and Intuit—are seeing sharp declines, underscoring sector-specific weakness despite overall market optimism.

Large Treasury settlements this week are set to remove roughly $130 billion from the overnight funding market, with the reverse repo facility now nearly depleted. With liquidity tightening, repo rates rising, and market breadth weakening, funding for new debt issuance may increasingly pressure rates, equities, and money market balances.

In this week’s free YouTube Video, we prep for the July CPI report, which could play a crucial role in shaping market expectations for inflation. Market-based measures, such as inflation swaps, currently project elevated inflation into 2026, with attention focused on whether upcoming data confirms, accelerates, or challenges these trends.

8/4/25 The current market environment isn’t for the faint of heart. Significant drawdowns in the first quarter, followed by substantial rallies in the second, have created one of the most challenging landscapes I’ve encountered in years. Writing these letters is rarely easy, and this quarter is certainly no exception. In the first quarter, trimming our…

The S&P 500 failed to hold early gains, closing slightly lower and stalling at key Fibonacci retracement levels, raising the possibility of a trend change. Weakening market breadth, tightening liquidity from Treasury General Account (TGA) refilling, and global yield spread shifts are reinforcing caution signals for equity investors.

Apple’s strength drove the S&P 500 higher in an otherwise subdued market session, with broader indices showing minimal change. Yield curve spreads indicate potential steepening scenarios ahead, influenced by rising inflation expectations and possible stagflation risks.

Markets retreated slightly after disappointing ISM services data pointed to weakening economic momentum, raising concerns ahead of next week’s CPI release. Technical indicators show key indexes at pivotal retracement levels, while the dollar struggles to regain bullish momentum despite recent attempts.

Stocks rebounded on Monday after a sharp sell-off last Friday, despite persistent bearish signals from technical indicators and muted activity in bond yields and currency markets. Volatility eased slightly, driving the rally, though rising bond volatility (MOVE Index) suggests continued caution.

Stocks declined sharply after July’s job report severely missed expectations, compounded by large downward revisions for prior months, shaking investor confidence. Treasury yields fell dramatically, reflecting market anticipation of faster-than-expected rate cuts, while technical indicators for the S&P 500 suggest potential further downside risks.

Despite strong performances from Meta and Microsoft, the S&P 500 fell amid rising volatility and a hotter-than-expected PCE report, with technical patterns hinting at potential market weakness. With the dollar strengthening and implied correlations climbing, investor focus now shifts to a potentially market-moving jobs report.

Stocks fell following the Fed’s decision to maintain interest rates and Jay Powell’s cautious stance toward rate cuts, while a stronger dollar and climbing Treasury balances threaten market liquidity. Copper prices plummeted by 17% after Trump imposed a surprise tariff, raising new questions about inflation forecasts.

Weaker-than-expected JOLTS data led Treasury yields lower despite persistent support levels, while the dollar advanced for the fourth consecutive day amid mixed economic signals. Notable divergences—particularly in USDJPY, Treasury yields vs. inflation expectations, and equities vs. high-yield spreads—highlight ongoing market uncertainty, with investors seemingly awaiting a clearer catalyst.

Markets opened the week with little fanfare despite key developments in Treasury funding plans and a strong dollar move, particularly against the euro. With the S&P 500 remaining overbought and the Treasury set to borrow over $1.5 trillion across two quarters, upcoming issuance details could prove pivotal.

This week brings numerous critical events, including key economic reports, significant Treasury auctions, major central bank decisions, high-profile earnings, and a court case reviewing presidential tariffs. Despite these volatility catalysts, current implied volatility remains suspiciously low, suggesting a potentially significant market disruption if trading remains overly complacent.

Japanese government bonds (JGBs) are nearing a significant breakout point, potentially driving yields higher and impacting the USDJPY exchange rate, which hinges on the narrowing US-Japan rate spread. Meanwhile, earnings-driven volatility from Alphabet and Tesla, alongside weak sentiment toward Wingstop and Coreweave, highlights broader market caution as momentum fades in key indices like IWM.

The S&P 500 is experiencing exceptionally low volatility and implied correlation, a pattern historically associated with market peaks, suggesting potential caution ahead. Combined with elevated tail-risk signals from the rising SKEW index, these indicators point toward possible instability in market dynamics.

Stocks stagnated as rates and the dollar fell, pushing gold and copper higher.

Strange day of trading with the market trading sharply higher, only to give it all back.

The US yield curve may continue to steepen, driven by rising inflation expectations and increasing bond yields in Japan.

Despite the S&P 500 maintaining stability above its 10-day exponential moving average, upcoming earnings season and rising inflation expectations could significantly increase market volatility. A bottoming in implied correlations, coinciding with earnings, historically signals potential market shifts, while inflationary pressures further complicate the outlook by likely pushing Treasury yields higher.

Markets saw subdued trading influenced by July options expiration, though long-term inflation expectations, reflected in rising CPI swaps, reached notable highs. Meta’s technical breakdown could indicate broader market vulnerabilities, especially given its key role in recent market strength.

Stocks were hit hard today, as rates and the dollar surged.

Stocks have been rising despite unusual market signals, including increasing implied volatility, widening credit spreads, and significant FX movements. This analysis explores why these conflicting indicators may hint at an impending market pullback, particularly examining key technical levels for the S&P 500 and Taiwan Semiconductor ahead of earnings.

Tariff tensions drive a significant dollar breakout and a surge in long-term yields, hinting at increasing inflation expectations. As stocks approach a potential peak, technical indicators signal caution ahead of earnings season.

Stocks declined after President Trump announced new 25% tariffs effective August 1 for countries including Japan and South Korea, increasing market uncertainty. Meanwhile, the dollar index is signaling a potential reversal higher, suggesting volatility could rise further in coming days.