Treasury Blinked: A Bessent Put Too Small To Matter

Treasury raised its buybacks by $2 billion an operation, and the whole long end rallied. I make that 0.15% of the $1,367 billion it expects to place over two quarters. From July 17 to August 17 the 2-year barely moved, 4.18% to 4.19%, while the 30-year went up 25 bp to 5.31%. That gap ain't bullish for risk equities. I want to see the 30-year TIPS yield back below 2.87%, and long-end auctions that clear without investors demanding more. Short-term, I'm actively de-risking, raising cash, and monitoring the charts for a better re-entry point. I think the markets need a U.S.-Iran deal to resume the rally. Long term, I don't see a bear market, especially with markets having sharply reduced the odds of a September Fed hike and hyperscaler CapEx remaining intact.

On August 18, Treasury ran one of its regular buyback operations in the long end. It came to buy $2 billion of bonds, which is nothing if you compare it to the $32.2 trillion Treasury debt market.

Thematic. Top down. I often find the theme before I find the stock. My philosophy is that themes are often born quiet and die loud. I try to catch them while they're still finding their voice. When the music plays, I mainly chase pockets that rhyme with growth, momentum, perception shifts, and sometimes even the most absurd narratives (mostly AI-related). When the music slows and the tape deteriorates, I don't wait around. I raise cash/rotate out, and watch for the next setup. A parabolic run may trigger a similar move. During a bull run, you won't find much common ground between the deep value crowd and me. I liked the core ideas of deep value investors, and I briefly followed that philosophy. However, it demands patience, and the AI supercycle broke whatever patience I had left. The market changed, and so did I. My style is not set in stone. I’m mostly long when the music is playing. When it stops/slows down, I may dabble with shorts via put options, although it’s not my forte. My style is highly speculative. I have a high risk tolerance that most rational investors would find alarming. I don’t have a favorite timeframe. That said, I trade mostly the mid-term and the short-term. I have a pathetic low six-digit portfolio, and I consider myself part of the mid to low end of the K-shaped economy. It sometimes drops to the five-digit range when life has other plans. I've been in the game since mid 2024, although my first dabbles with stocks (i.e., burning $100 trading accounts in a matter of days) go back to the early/mid 2010s. I have a B.Sc. in aeronautical engineering and experience as a consultant in the aerospace sector. The latter statement is not relevant to my investment style, but I thought to add it for self-indulgent purposes. I live on the wrong side of the Atlantic. The opening bell is my lunch bell. I like astrology, so I’m a follower of technical analysis (mainly trends and support/resistance/psychological levels). I also look at the fundamentals of individual names, although the theme and the macro often prevail in my decision-making. I dislike empty suits, high-level BS, deep-level BS (especially), unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.