The way the Treasury bond market works is not something most people, myself included typically consider. The US Government regularly holds auctions for bonds and that is a one of the key indicators on the value of bonds in the market. Those bonds in turn help provide a foundation for the prices of US-based stocks. Today started like any other day, with positive news for AMD helping my long positions but scuttling some short positions. That was until this happened:

Weak Auction of Government Debt Jolts Markets

According to reporting on the auction there was weak appetite for longer term bonds, which spooked investors. Personally I don't think anybody should be surprised since the bond market has pretty wacky since January. Most of the bond investments investors have been willing to pursue have been 2 year bonds rather than anything with a longer-term time horizon.

Investors are unsurprisingly not buying the promises made by the White House. The hollow assurances that their economic sabotage with haphazard tariff policy the Trump-led budget plan, will somehow spur growth are based on nothing but wishful thinking. As the budget discussion in Congress has unfolded it has become clear to everyone that it will increase the deficit.

Oh, all this a day or so after Moody's downgraded the credit worthiness of the United States.

I do wonder how long the house of cards can continue. The past years have seen countless stories about the strength of the economy thanks to the American consumer. People cannot spend in perpetuity, especially the prospect of stagflation facing Americans. The sales front-loaded by tariff fears are obviously not sustainable revenue we will see in future earnings. Consumers won't be spending when they fear for their jobs or face higher prices

Valuations in the technology and semiconductor sector I believe to be justified only so long as the economy continues to grow, which I fear the right-wing of American politics is determined to prevent.