Category Archives: News

MBS RECAP: Was the Eclipse a Market Mover?

It’s a good thing financial media outlets aren’t too shy about covering topics outside the financial sphere because without the eclipse, there would have been nothing to talk about today.  Volume and volatility dropped off a cliff, abruptly.  In fact, the difference in tone was big enough that I wouldn’t mind chalking up some of the ABSENCE of trading as a symptom of the eclipse.  In other words, it wasn’t necessarily a market mover as much as a market inhibitor.

All that having been said, it would be hard to sort out just how much of the market’s quietude was attributable to eclipse as opposed to the simple nature of the Summertime trading environment.  Mondays tend to struggle for relevance in August regardless of astronomical events.

If the eclipse possibly didn’t matter, why am I still talking about it?  Again, because there’s literally nothing else to talk about today.  Bonds started in slightly stronger territory, but remained well-within Friday’s range.  Both MBS and Treasuries generally orbited Thursday’s latest levels and we continue waiting on more liquidity and volume before getting a better sense of how this week will shape up.

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MBS Day Ahead: Nothing to do With The Eclipse

Welcome!  Here is a safe haven from all of the eclipse talk.  It won’t be mentioned at all in this article.  Never mind that it’s in the title and the first 3 sentences, because we’re about to move on.

Bond markets begin another “summertime” week where “summertime” refers not only to atmospheric seasonality but also to changes in market environment.  We’ve talked about this ad nauseum recently–largely because it’s summer and the seasonality is one of the more interesting features of bond trading at the moment.  And yes, that’s like saying that the most interesting thing about a sloth is how slow it moves.  

If you’re interested in getting caught up on some of this “summertime” stuff, Friday’s Day Ahead went into greater detail.  Thursday’s wasn’t bad either.

Unlike the average summertime week, the current week ends with an event that has had varying levels of impact on bond markets with some examples being incredibly significant.  We’re talking about the Fed’s Jackson Hole symposium.  You might see the word “confab” used to describe the event as well.  This apparently references “confabulation”–a word no one knows or uses, but that was all the rage several years ago.  We’ve moved on to “symposium” these days, but in a few years it will probably just be the “Once Annual No-Tie Friday, Wine and Cheese, Meet and Greet For Central Bankers.”  

Actually, we’ll still probably see more than a few suits and ties, if we deign to tune in this year.  But why the attitude of resignation?

Jackson Hole used to be an event that had the potential to serve as an early indication of upcoming monetary policy changes.  It’s informal nature lent itself to more candid remarks–especially from the Fed Chair.  While that remains a possibility, I’m not sure what Yellen could say that we don’t already know.  They’re likely to begin tapering reinvestment purchases in September, and are about 50/50 on hiking again in December.

What about Draghi?  European Central Bank (ECB) President Mario Draghi will be in attendance this year, and even I had entertained the possibility that Draghi would drop a hint about the ECB’s September meeting.  But last week, “sources” (gotta love them) say that Draghi will punt on any questions about the future, and simply maintain that the September meeting has yet to take place.  In other words, anyone hoping for an early read on ECB tapering potential will just have to wait 2 weeks until their next meeting/announcement.

Where does that leave us, then?  Somewhere in the middle of the yellow lines in the chart of 10yr yields below, and hopefully not bouncing too hard on the teal lines like we did in April.  Anything inside the yellow lines and anything other than a hard bounce (or massive break?) of the teal lines is completely forgettable.

2017-8-21 open

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How companies are cashing in on the solar eclipse

eclipse glasses

It’s the lunar event of the century — and some companies are cashing in.

August 21 will mark the first total solar eclipse that will be visible coast-to-coast from the mainland United States since 1918.

As people prepare for the main event, U.S. businesses — from national chains to mom-and-pop shops — are starting to hawk special eclipse-themed merchandise.

Here are some of the commemorative eclipse products and promotions out there now.

Krispy Kreme’s Chocolate Glazer

Krispy Kreme will sell its first-ever chocolate glazed doughnut during the eclipse.

The donut shop lists participating stores on its website. It will also sell the treats on August 19 and 20 during special hours.

“The solar eclipse is a rare occasion — providing a total sensory experience for viewers across the continental U.S.,” Jackie Woodward, Krispy Kreme’s marketing chief, said in a statement. “Chocolate will have the same effect as we introduce a first-time chocolate glazing of our iconic Original Glazed Doughnut.”

Jackson Hole’s Eclipse-themed booze and coffee

The eclipse will be in perfect view for anyone in the Jackson Hole valley area of western Wyoming.

One local brewery there has come up with a fun concoction dubbed “Eclipse” beer, and it’s is also hosting a party at its Jackson Hole venue.

Snake River Roasting Co. also has a special product on the market: eclipse coffee.

Ruth Ann, a spokesperson for the coffee house, told CNNMoney that the coffee has been “selling like mad.”

eclipse coffee snake river roasting

Portland’s pot tribute

Cannabis dispensaries in Oregon are not shying away from eclipse promotions.

A pot shop in Portland called Oregon’s Finest has started selling a strain of weed it’s named “moon puppies.”

moon puppies weed

The state is one of only seven (plus D.C.) that has legalized recreational marijuana use. And it’s the only state in the path of totality that that allows legal weed.

Viewing glasses made in Knoxville

Tennessee-based Paper Optics usually sells 3D glasses.

But the company has been making some special eyewear in preparation for the eclipse.

Special ultra-dark sunglasses are needed to safely view the event. And Paper Optics has been producing millions of pairs over the past couple of years to prepare for the demand, according to the Associated Press.

In the wake of the demand, there have been some reports of unsafe bogus eclipse glasses that may not be dark enough to protect your eyes.

But the American Astronomical Society lists the glasses made by Paper Optics as having met international safety standards.

The “Total Eclipse Cruise”

You won’t even have to be on land to watch this eclipse. One cruise liner is advertising the chance to see the sky show by sea.

Royal Caribbean is offering a “Total Eclipse Cruise” that it calls an “out-of-this-world” weeklong trip. The cruise will sail to “the optimal spot at sea for guests to witness the total solar eclipse,” the company said in a press release.

On Wednesday, the cruise line also announced that Bonnie Tyler would be a special guest aboard the trip — and she would perform her smash hit song, “Total Eclipse of the Heart” during the celestial event.

The the ship will set sail on August 20 from Orlando, Florida and stop by several other destinations — including Phillipsburg, St. Maarten; Charlotte Amalie, St. Thomas; and Nassau, Bahamas — on the week long adventure. Just days away from departure, the only tickets left on sale cost thousands of dollars.

Oregon’s solar eclipse shoes

The small town of Philomath, Oregon isn’t usually a tourism hot spot. But because it lies in the path of totality, Philomath is expecting a flood of visitors August 21.

A local handcrafted shoe company, Softstar Shoes, is trying to capitalize on the attention with a special edition eclipse slipper.

Softstar Shoes eclipse

“These moccasins are handcrafted in-house and are made of smooth, buttery soft leather and luxurious sheepskin,” the company said in a statement.

“The Banana Sun”

Chiquita — yes, the banana company — has claimed to have created the “ultimate eclipse-themed (marketing) phenomenon.”

The company has cheekily claimed for weeks that they will be responsible for the eclipse. But Chiquita claims the special moment to watch for is just before and after totality.

For “two glorious moments” before and after the the moon fully blocks the sun, it will “turn the burning ball of gas in the center of our solar system into a giant banana,” the company said.

If it sounds crazy, Chiquita is owning that fact. It named its new marketing strategy “We Are Bananas.”

Chiquita is partnering with the comedy team at Funny or Die for a live stream event the morning of the eclipse. It kicks off at 9:15 am PT.

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