Greetings, United States: The impact on household net worth has been much less severe in this recession than after 2008. That’s mostly due to the stability of the housing market and the rebound in stock prices. Equity price gains, in particular, should boost consumer spending. While it’s mostly the higher-income households that own stocks, …
The Daily Shot Brief – June 29th, 2020
Greetings, Administrative Update Please note that the Daily Shot will not be published on Friday, July 3rd. Rates: Flows into inflation-protected bond funds soared as investors hedge against a potential inflation shock. As a result of this demand for inflation product, yields on inflation-linked Treasuries (TIPS) continue to fall. These yields are a measure of …
The Daily Shot Brief – June 26th, 2020
Greetings, United States: The declines in initial unemployment claims have stalled (the chart below is not seasonally adjusted). Including the Pandemic Unemployment Assistance (PUA) claims, new filings are holding above two million per week. China: The increase in local government bond issuance, coupled with fiscal and monetary stimulus, could bolster industrial production. …
The Daily Shot Brief – June 25th, 2020
Greetings, United States: The Oxford Economics activity tracker shows the US recovery slowing. After a sharp post-reopening rebound, we are entering the slow phase of the recovery. Eurozone: Italy has been issuing large amounts of bills to cover crisis-related expenses. Europe: European household saving rates rose sharply this year. Equities: Earnings …
The Daily Shot Brief – June 24th, 2020
Greetings, United States: According to Alpine Macro, stronger than expected retail sales in May were partly driven by a temporary boost in consumer incomes (in excess of savings). Eurozone: As we saw yesterday, the PMI reports showed marked improvement in business activity, especially in France. Equities: Globally, 80% of the markets trade …
The Daily Shot Brief – June 23rd, 2020
Greetings, United States: Mortgage forbearance requests have slowed. Eurozone: Lufthansa bonds tumbled after Thiele’s threat to block the rescue plan because it dilutes current shareholders (see story). China: The PBoC has emphasized long-term liquidity injections this year. Equities: Large firms are sitting on a great deal of cash. Credit: High …
The Daily Shot Brief – June 22nd, 2020
Greetings, Equities: The tech mega-cap stocks (FAANGM) now represent 24% of the S&P 500 market capitalization. The portion of the market’s lofty valuations attributed to FAANGM keeps climbing. Credit: The cost of debt capital for US investment-grade firms has never been this low. The Fed’s recent actions invited quite a bit of capital …
The Daily Shot Brief – June 19th, 2020
Greetings, United States: Initial jobless claims declined from last week, but the latest figure was above economists’ estimates. Continuing claims are holding above 18 million. The labor market is facing a long recovery. Eurozone: The demand for the latest tranche of TLTRO financing was remarkably strong (€1.3 trillion). When your central bank offers you a …
The Daily Shot Brief – June 18th, 2020
Greetings, United States: Let’s begin with the housing market. Residential construction didn’t rebound much in May. Economists were hoping to see more of a pop in housing starts. Mortgage applications suggest that we should have already seen a stronger bounce in the housing market. Canada: Canada faces deflation for the first time in …
The Daily Shot Brief – June 17th, 2020
Greetings, United States: Finally, we have some data on the PPP program (from Celeri Networks). Eurozone: Italian government debt is still mostly held by domestic investors. Equities: Robinhood’s profits show a spike in retail investor interest in options and smaller stocks. Credit: New CLO reinvestment periods have shortened dramatically. “Static” means that …
