Greetings, Energy: Crude oil storage facilities are getting filled quickly. Also, the slump in global liquids production this year will be unprecedented. Credit: US banks’ credit loss provisions are piling up. Also, junk bond ETFs now trade at a premium to their net asset values (NAV). Rates: Central banks are …
The Daily Shot Brief – April 15th, 2020
Greetings, United States: Many households will not be able to manage their high-interest auto loans. Also, the airline industry is in deep trouble. Europe: UK government spending and gilt issuance will spike in the months to come. Will the BoE boost its QE program to absorb all the new debt? …
The Daily Shot Brief – April 14th, 2020
Greetings, United States: The budget deficit widened further in March. But last month’s increase was just the tip of the iceberg. The budget gap is expected to exceed WW-II levels this quarter, according to Nomura. Below is an estimate from Fitch for the full year. Eurozone: The Eurozone GDP contraction will depend on …
The Daily Shot Brief – April 13th, 2020
Greetings, United States: Let’s begin with the labor market. Over six million Americans filed for unemployment the week ending April 4th. If the unemployment rate climbs to 15% (as recently projected by Goldman Sachs), we could be looking at 5.5 million past-due mortgages, according to Black Knight. China: Economic activity has been rebounding. …
The Daily Shot Brief – April 9th, 2020
Greetings, United States: Mortgage applications to purchase a home continued to decline last week. Also, refinance applications are off the highs but remain elevated. On a bright side, most layoffs so far have been classified as “temporary.” Eurozone: German government bond issuance will more than double from the previous Q2 plans, …
The Daily Shot Brief – April 8th, 2020
Greetings, United States: Here is a comparison of the potential GDP trajectory vs. the previous recession. Eurozone: German industrial production is expected to deteriorate, but not all sectors will be severely impacted. China: The PBoC has been lowering policy rates. And the market expects further cuts. Here is the 2-year swap rate. …
The Daily Shot Brief – April 7th, 2020
Greetings, United States: The speed of the Federal Reserve’s securities purchases has been unprecedented. The chart below compares the current quantitative easing (QE) trajectory to previous programs. Will the Fed’s balance sheet reach $9 trillion? According to BofA Global Research, the Fed will fully fund the massive 2020 deficit. It’s the US version of …
The Daily Shot Brief – April 6th, 2020
Greetings, Administrative Update Please note that the Daily Shot will not be published this Friday, April 10th. United States: The US lost about 700k jobs (Morgan Stanley’s forecast was spot on). Given the initial unemployment claims figures, the March report was just the tip of the iceberg. Commodities: Funds have dramatically shortened their exposure to commodities. …
The Daily Shot Brief – April 3rd, 2020
Greetings, United States: Bank of America now sees the GDP contracting by over 10% for the whole year. Eurozone: The number of new infections in Italy is gradually trending lower. China: The PMI report from Markit shows China’s service-sector business activity still in decline (PMI < 50), but the rate of contraction …
The Daily Shot Brief – April 2nd, 2020
Greetings, United States: Many economists were predicting an even more severe rise in initial jobless claims than what we saw last week (the report is out 8:30 AM EST today). Below is an estimate from Desjardins. The real number came out to 6.6 million. Goldman Sachs downgraded the Q2 GDP growth forecast again. …
