BQC Morning Comments Sept 18.24

MORNING COMMENTS

Geopolitics:

At 3:30 pm in the afternoon Israel detonated thousands of pagers in Lebanon owned by Hezbollah terrorists. The pagers were imported months ago from Taiwan and were only recently given to Hezbollah terrorists. They got pagers because they believed Israel was monitoring their cellphones. Israel’s original plan was to use the explosives against Hezbollah if a full scale war broke, but when a few members discovered the small explosive placed in each pager next to the battery, Israel was forced to punch the ticket early. at 3:30 pm thousands of pagers received a message that appeared to be from Hezbollah leadership before ultimately exploding seconds later. 4000 people injured, 500 of them are critical, and 11 dead.  10 of the 11 killed were Hezbollah terrorists. It all sounds like a scene out of Black Mirror.    

Macroeconomics:

My take of the rate cut today. If the Fed decides to cut 25 points, then Powell’s comments will come across more dovish for the next two cuts this year. If the Fed decides the cut 50 points, his comments will still be dovish, but less dovish than if the cut was only 25 basis points. It will not be friendly to the equity markets in the Fed only cuts 25 points.  

Ag Fundamentals:

The algorithms, machines and A.I. are to blame for the overnight action in the soybean market. Beans up 10¢ and traded above the 50 day moving average or the first time since late May. I was going to say it was due to the last 60 days of dry weather in the US lowering production estimates or continued dryness in Brazil, but i don’t think those two reasons are valid. It is more likely today that Brazil will receive rain in October than it has been all month. 

Weather:

AI weather models are starting to pick up a system in the gulf developing in late September. Close to 10 days out from today, a tropical depression is expected to develop, head north from the gulf, through the southeast and up the east coast. 8-14 day map shown below.