At a critical moment, Biden suddenly announced.
On November 6th local time, US President Biden promised workers at a train repair plant in Delaware that a new government investment plan would provide more job opportunities. The White House statement states that these projects will create 100000 union jobs. In the previously passed US Infrastructure Act, the Biden administration promised to invest a total of over 66 billion US dollars (approximately 480 billion yuan) in passenger railways.
At the same time as announcing major investments, Biden exposed a dangerous signal in the 2024 presidential election. Recently, David Axelrod, a senior advisor to former US President and Democratic leader Obama, publicly warned on social media that new public opinion polls show Biden trailing former US President Trump. Therefore, Biden should consider withdrawing from the 2024 election.
At the market level, the current US treasury bond bond market may face an epic price. According to the latest data disclosed by the U.S. Commodity Futures Trading Commission (CFTC), as of October 31, the net short position of U.S. treasury bond bond futures of leveraged funds had increased to the highest level since 2006. Analysts warned that the short position of US treasury bond bonds last week seemed to have reached an extreme level, and it was a "accident" that would happen sooner or later.
Biden Announces Big News
On November 6th local time, US President Biden promised workers at a train repair plant in Delaware that a new government investment plan would provide more job opportunities.
I have prepared about $60 billion for you, "Biden said as he shook hands with a worker on site.
Biden announced in his speech that the government will provide a new $16 billion funding for the train project from Washington D.C. to Boston along the Northeast Corridor.
In the previously passed US Infrastructure Act, the Biden administration promised to invest a total of over 66 billion US dollars (approximately 480 billion yuan) in passenger railways.
The White House statement states that these projects will create 100000 union jobs.
According to a statement released by the White House, the largest construction projects among the $16 billion new passenger rail funds include:
Invest $3.8 billion in the Hudson River Tunnel (New York/New Jersey), which plans to renovate and expand the century old tunnel that was damaged by Superstorm Sandy;
The investment in the Frederick Douglas Tunnel (Maryland) is $4.7 billion, and the 150 year old Baltimore and Potomac tunnels are known as the "largest bottleneck in the Northeast Corridor between Washington and New Jersey," with an expected completion date of 2035;
Investing $2.1 billion in the Susquehanna River Bridge (Maryland), the 100 year old railway bridge located on the Susquehanna River in Perryville will be replaced by two new double track bridges, increasing train speeds from 90 miles per hour to 120 miles per hour;
Investing $1.6 billion in the Pennsylvania Station Corridor (New York), White House officials estimate that the project will shorten commuting time between downtown Manhattan and the Bronx by up to 50 minutes, and the project, which is already under construction, will also build four new train stations;
Invest $827 million in the Connecticut River Bridge (Connecticut), a century old bridge that will be replaced by a new one. Train speeds can be increased from 45 miles per hour to 70 miles per hour. The project is expected to commence construction in 2024.
US Secretary of Transportation Butygig stated that these investment projects are "crucial" and that Americans need and deserve a world-class railway system, which is also President Biden's vision. But for decades, as a country, our investment in passenger railways in the United States has been noticeably insufficient.
A White House official stated that this funding "will upgrade the aging infrastructure on the busiest railway corridor in the United States to increase train speed, reduce passenger delays, and create high paying union employment opportunities.
Danger signals
At the same time as announcing major investments, Biden's situation in the 2024 election suddenly exposed a dangerous signal.
Recently, David Axelrod, a senior advisor to former US President and Democratic leader Obama, publicly warned on social media that new public opinion polls show Biden trailing former US President Trump. Therefore, Biden should consider withdrawing from the 2024 election.
The poll mentioned by Axelrod was organized by The New York Times and Siena College, with a total of over 3600 respondents. The recent results have been quite unfavorable for Biden: Trump has already gained more support in five of the six key states.
Polls show that 67% of people believe that the United States is on the wrong path, 44% of respondents believe they will vote for Biden in the 2024 election, and 48% of respondents say they will support Trump.
It is worth mentioning that among the six major battleground states, only Wisconsin has more respondents supporting Biden than Trump (47%: 45%), while the other five states - Arizona, Georgia, Michigan, Nevada, and Pennsylvania - all have Biden trailing Trump.
At present, the situation in the six major battleground states proves the weakness of the Democratic Party and Biden. In 2020, Biden successfully won the White House by winning all six states, but now his old opponent Trump has a tendency to turn the tables.
Regarding this, Axelrod stated that it is too late to make a temporary switch and there is little time left for the primaries.
Axelrod claimed that Trump was a crazy demagogue, and his contempt for rules, laws, and other things made him ineligible to hold public office. However, he now holds an advantage.
Among a series of factors driving voter voting, such as economy and foreign policy, Biden's age is the most concerning topic. Axelrod stated that among all the unpredictable things, Biden's age is the only predictable thing.
Polls show that 71% of registered voters believe that Biden is too old to effectively lead the United States.
In addition, when asked if the candidate possesses the acumen to become president, 62% of voters denied Biden's ability, while 52% of respondents claimed that Trump possesses this ability.
An epic close up?
According to the latest data disclosed by the U.S. Commodity Futures Trading Commission (CFTC), as of October 31, the net short position of U.S. treasury bond bond futures of leveraged funds had increased to the highest level since 2006. Despite the rebound in cash bonds last week, investors' bets continue.
According to Fox Business, the data released by the US Treasury Department shows that as of September 18, the US treasury bond had reached US $33.04 trillion (equivalent to 240 trillion yuan). Zhang Yu, Deputy Director of Huachuang Securities Research Institute and Chief Macro Analyst, pointed out that there may be significant fluctuations in US bond yields in the short term. Zhang Yu believes that the current short selling of US bonds is extremely crowded. CBOT's 10-year US Treasury net short position has basically reached a historic high, and once the position is closed, it will form a stampede, causing interest rates to fall particularly quickly.
Gareth Berry, Macquarie Group's strategist in Singapore, warned that last week's short position in US treasury bond bonds seemed to have reached an extreme, and the forced short market was an "accident" that would happen sooner or later.
Gareth Berry pointed out that the trend of US bonds in the past few months shows one thing. The persuasive narrative has promoted the price trend of US treasury bond bonds. However, the market has overreacted, the price fluctuation has exceeded the normal level, and is currently correcting.
The latest data shows that the yield of the US 10-year treasury bond bond has dropped 41 basis points to 4.61% since it reached a peak of 5.02% on October 23.
Analysts pointed out that under the dual positive situation of the US Treasury's lower than market expectations for the issuance of refinanced bonds in the new quarter, and the Federal Reserve's suggestion that the interest rate hike cycle has ended, it may have stimulated a widespread covering of short positions.
According to swap data, traders expect interest rates to be lowered by more than 100 basis points from the expected peak of 5.37% by the end of next year. After the Federal Reserve's interest rate meeting and the release of employment data, traders raised their expectations for the first rate cut from July to June.
Wall Street analysts say this is a good time to invest cash in US Treasury bonds, which are more attractive compared to US stocks for the first time in many years due to the surge in ultra-low risk US bond yields.
Amy Xie Patrick, head of yield strategy at Pendal Group, told the media that given the current yield, she is optimistic about bonds. Long term treasury bond is a traditional safe haven asset. At a time of market volatility and geopolitical instability, buying bonds is usually regarded as a safe choice.