The Daily Shot Brief – January 27th, 2020

Greetings,   China: The Wuhan coronavirus continues to spread, with quarantines appearing to be much less effective than some had hoped (see story). While China’s markets are closed, stock futures are down over 5% today. And the offshore renminbi dropped sharply as well.   Eurozone: At the Eurozone level, manufacturing activity appears to be stabilizing …

The Daily Shot Brief – January 24th, 2020

Greetings,   United States: CPI volatility is low relative to asset price volatility. According to Morgan Stanley, dovish Fed policy chasing higher inflation is more likely to result in higher asset price inflation before we get to higher consumer inflation. And that could pose a risk to financial stability.   China: Although local state-owned enterprises (SOEs) are …

The Daily Shot Brief – January 22nd, 2020

Greetings,   United States: The growth in revolving consumer credit is falling behind the increase in wages. According to TS Lombard, this indicator typically spikes heading into a recession or periods of perceived economic stress.   China: The renminbi declined for the second day (chart below), and China’s stock market slumped (second chart) on worries …

The Daily Shot Brief – January 17th, 2020

Greetings,   China: Analysts remain concerned about China’s rising nonperforming loans (NPLs). The chart below shows that rural banks have the highest non-performing loan (NPL) ratio. And NPLs for city-based banks increased substantially over the past two years.   Eurozone: According to UBS, only a handful of European countries (Germany, Netherlands, Finland) will have a low enough …

The Daily Shot Brief – January 16th, 2020

Greetings,   The United States: The January manufacturing report from the NY Fed (Empire Manufacturing) showed some hopeful signs. The Empire State index improvement bodes well for manufacturing activity at the national level (ISM).   The United Kingdom: The market-based probability of a BoE rate cut this month climbed further in response to the CPI …