Greetings, United States: Initial and continuing unemployment claims remain at multi-year lows. United Kingdom: The pound rose in response to the resignation of British finance minister Sajid Javid. Traders expect Javad’s replacement to boost government spending, which, in theory, should stimulate growth. China: China’s total debt-to-GDP ratio climbed sharply last year, hitting …
Continue reading “The Daily Shot Brief – February 14th, 2020”
Greetings, China: The coronavirus has put a third of China’s population and nearly half it’s GDP under lockdown. The Eurozone: In 2019, the euro-area manufacturing output declined by the highest percentage since the Great Recession. United States: Once again, the US budget deficit was worse than the consensus estimate ($33 bn vs. $10 …
Continue reading “The Daily Shot Brief – February 13th, 2020”
Greetings, The United States: Morgan Stanley’s model points to a rebound in core retail sales in January, backed by a series of upside surprises in hard and soft economic data. The Eurozone: The Eurozone needs to see some stabilization in industrial production to avoid a recession. China: A sizeable number of China’s banks are …
Continue reading “The Daily Shot Brief – February 12th, 2020”
Greetings, United States: Auto loan delinquencies have diverged from other consumer credit markets. The velocity of money hit a multi-decade low. One way to think about this trend is that it takes an increasing amount of credit (including bank credit to the federal government) to generate the same amount of GDP. The Eurozone: Germany’s …
Continue reading “The Daily Shot Brief – February 11th, 2020”
Greetings, United States: Americans are increasingly confident in their financial situation. Eurozone: Germany’s December factory orders and industrial production reports were so bad that analysts are using the “R” word again. Here is the breakdown by sector. Nonetheless, Commerzbank’s GDP tracker for Germany shows a rebound. Asia-Pacific: Goldman Sachs expects the coronavirus to be …
Continue reading “The Daily Shot Brief – February 10th, 2020”
Greetings, Global Developments: Healthcare funds are benefitting from sizeable inflows, in part due to the epidemic. But so are other risk assets. The United States: The Fed’s accommodative monetary policy produced substantial asset inflation, while growth in “real economy” prices has been modest. Also, one of the reasons for low volatility in …
Continue reading “The Daily Shot Brief – February 7th, 2020”
Greetings, United States: US demand for housing finance is heating up as mortgage applications to purchase a home hit a multi-year high. Mortgage refinance activity rose to the highest level since 2013. United Kingdom: Survey data continue to surprise to the upside as business expectations rebound. Here is the service-sector PMI from Markit. …
Continue reading “The Daily Shot Brief – February 6th, 2020”
Greetings, Equities: Here is the MSCI World Index performance after major epidemics. Credit: The chart below shows the annual default counts and defaulted debt volumes over time. Issuer-weighted default rates increased in 2019, led by energy and retail. Energy: Fitch Solutions now expects an even faster pace of adoption of alternative …
Continue reading “The Daily Shot Brief – February 5th, 2020”
Greetings, The Eurozone: German banks are holding record amounts of physical cash. China: The government is expected to continue providing substantial fiscal stimulus to the economy in 2020. Commodities: ETFs’ holdings of gold hit another record high. Energy: The front of the Brent curve shifted into contango (positive-sloping) amid demand concerns. …
Continue reading “The Daily Shot Brief – February 4th, 2020”
Greetings, China: The nation’s central bank (PBoC) injected a huge amount of liquidity into the financial system as the markets reopened after the Lunar New Year holidays. The PBoC wanted to make sure there is ample liquidity for banks to keep rolling their liabilities (cash borrowed before the holidays). The United Kingdom: Foreigners …
Continue reading “The Daily Shot Brief – February 3rd, 2020”
