Greetings, The United States: Higher labor costs are pressuring corporate margins. The Eurozone: Traders are upbeat on the euro. Here is the 3-month EUR/USD risk reversal. Emerging Markets: Quantitative easing in developed economies should support EM equities. Energy: The Brent curve backwardation continues to climb, which tends to signal tight supplies. Equities: …
Continue reading “The Daily Shot Brief – December 31st, 2019”
Greetings, The United States: Strong labor markets have been supporting consumer sentiment. Additionally, holiday sales on the final Saturday before Christmas hit a new record. China: China’s sovereign credit default swap spread continues to tighten. It should be noted that corporate bond defaults hit a record this year. Commodities: …
Continue reading “The Daily Shot Brief – December 30th, 2019”
Greetings, Administrative Update The next Daily Shot Brief will be out on Monday, December 30th. Equities: Below is the consensus forecast for the S&P 500 (above 3,400 next year). Energy: The recent rally in oil prices seems to be inconsistent with rising inventories. Emerging Markets: According to Oxford Economics, global industrial growth …
Continue reading “The Daily Shot Brief – December 20th, 2019”
Greetings, Emerging Markets: The growth in global central bank balance sheets has been positive for the EM shares. And the recent improvements in the US-China trade situation have been especially helpful. Equities: The S&P CAPE ratio has risen above 30 only three times in history. Rates: The Treasury curve has steepened substantially in recent …
Continue reading “The Daily Shot Brief – December 19th, 2019”
Greetings, The United States: Government spending has been supporting GDP growth in recent years. Government debt now exceeds household and non-financial corporate liabilities as a percent of GDP. The Eurozone: Recently, a weaker pace of consumption growth, possibly linked to rising external uncertainty, has lifted Spain’s savings ratio. China: China’s corporate default …
Continue reading “The Daily Shot Brief – December 18th, 2019”
Greetings, The United States: Economists question the US’ ability to ramp up exports to China to the levels that are in the “interim” deal. China (supposedly) agreed to buy $200 billion of US goods over the next two years above what it imported in 2017 (see story). This seems implausible. China: According to …
Continue reading “The Daily Shot Brief – December 17th, 2019”
Greetings, Administrative Update Please note that the Daily Shot Brief will not be published next week. The United States: Economic momentum is cooling as we enter 2020. United Kingdom: Friday’s British pound implied volatility decline was the largest since the EU Referendum. Eurozone: Oxford Economics expects Eurozone loan demand to cool as …
Continue reading “The Daily Shot Brief – December 16th, 2019”
Greetings, The United States: Once again, there was some confusion about the initial jobless claims data, which showed a spike. A good portion of this increase was due to the late Thanksgiving holiday, which distorted seasonal adjustments. Below we have the unadjusted data. United Kingdom: Early election results show a decisive victory for …
Continue reading “The Daily Shot Brief – December 13th, 2019”
Greetings, The United States: 13 of the 17 FOMC members expect rates to remain unchanged in 2020. The median “dot plot” has moved lower for both the 2020 and 2021 forecasts in each of the last five meetings. United Kingdom: It’s election day. Here are the latest predictions. The spread has tightened (as …
Continue reading “The Daily Shot Brief – December 12th, 2019”
Greetings, The United States: Let’s begin with the NFIB small business sentiment report, which showed growing optimism in November. China: Currency traders have been bidding up yuan options ahead of the December 15th US tariffs deadline. Commodities: Gold tends to be inversely correlated with US real rates. Equites: Most of the …
Continue reading “The Daily Shot Brief – December 11th, 2019”
