Greetings, Equities: It took remarkably little time for stocks to correct 10%. The VIX futures curve: Credit: High-yield fund outflows have accelerated. Credit spreads are now much too tight relative to equity implied volatility. Here is VIX vs. investment-grade and high-yield CDX spreads. Rates: The whole TIPS curve (real rates) …
Continue reading “The Daily Shot Brief – February 28th, 2020”
Greetings, Equities: The number of S&P 500 stocks trading above the 200-day moving average is approaching 50%. Credit: Spreads between BB and BBB bonds are higher amid increased risk aversion. Rates: The market-based probability of three rate cuts this year is approaching 90%. Here is the market’s expectation for the fed funds …
Continue reading “The Daily Shot Brief – February 27th, 2020”
Greetings, United States: Despite the rising concerns about the coronavirus epidemic, US consumer confidence remains robust. However, the stock market weakness is likely to dampen consumer sentiment in the weeks ahead. In addition, credit card delinquencies at smaller banks continue to climb. Eurozone: The euro area ranks just below Asian economies in terms …
Continue reading “The Daily Shot Brief – February 26th, 2020”
Greetings, Alternatives: Most private equity managers are preparing for a market downturn. Rates: Equity risk premium and term premium have been correlated and are in a structural decline, partly driven by global quantitative easing. Commodities: Gold has been increasingly correlated to Treasuries, especially at the short end of the curve. The trend suggests that …
Continue reading “The Daily Shot Brief – February 25th, 2020”
Greetings, Equities: Stock futures are heavy in early trading (chart below) amid rising coronavirus cases outside of China (second chart). Rates: The Fed officials’ language has been a bit more hawkish. Energy: Did Russia pull a fast one on Saudi Arabia in the OPEC+ agreement on production cuts? Emerging Markets: EM …
Continue reading “The Daily Shot Brief – February 24th, 2020”
Greetings, China: Hong Kong’s CPI surprised to the downside amid soft demand. Japan: Pavilion Global Markets expects Japan’s stimulus measures to continue to be targeted at aiding household consumption and boosting public construction activity. Here’s a breakdown of the GDP growth by component. United States: The Philly Fed regional manufacturing report was …
Continue reading “The Daily Shot Brief – February 21st, 2020”
Greetings, United States: Residential construction continues to surprise to the upside. The January housing starts and building permits exceeded market expectations. United Kingdom: Real earnings are finally above the pre-crisis peak. China: Other than the count adjustment a few days ago, the number of new coronavirus cases has been slowing. Equities: …
Continue reading “The Daily Shot Brief – February 20th, 2020”
Greetings, United States: The top 20% of households by income generate almost all the savings in the US. United Kingdom: The UK’s rising net foreign liabilities have been financing the trade deficit. Eurozone: The rebound in Germany’s ZEW indicator stalled amid concerns about the coronavirus epidemic (second chart). Germany’s industry is heavily …
Continue reading “The Daily Shot Brief – February 19th, 2020”
Greetings, United States: How much has the economy slowed in the current quarter? Weak business investment continues to weigh on growth. Japan: The Japanese yen (JPY) and Swiss franc (CHF) have benefited from a safety bid over the past year. China: Local debt issuance spiked as governments struggle with declining revenue. …
Continue reading “The Daily Shot Brief – February 18th, 2020”
Greetings, United States: The stock market gains have been boosting consumer confidence. The University of Michigan Consumer Sentiment and Consumer Expectations indices: Consumers’ assessment of their stock market investments: Eurozone: The Eurozone is experiencing its slowest growth since 2013: China: VC funding activity has slowed. Equities: The S&P 500 registered a bearish …
Continue reading “The Daily Shot Brief – February 17th, 2020”
