Greetings, United States: The economy rebounded in the third quarter, with the GDP climbing 33% (the highest increase on record). This chart shows quarterly changes in consumer spending on goods and services. Eurozone: The ECB is getting a bazooka ready for December. China: While money supply and credit continue to improve, monetary …
Continue reading “The Daily Shot Brief – October 30th, 2020”
Greetings, Equities: Stocks sold off sharply on Wednesday, with the S&P 500 giving up some 3.5%. Once we broke below 3400, the selloff intensified. Traditional risk mitigation/hedging strategies weren’t very effective on Wednesday for US investors. Treasuries didn’t budge: Neither did the Japanese yen: Energy: The January Brent contract is trading below $40/bbl. …
Continue reading “The Daily Shot Brief – October 29th, 2020”
Greetings, United States: Manufacturing momentum has carried over into the fourth quarter, with regional Fed indicators pointing to robust factory orders in October. Expectations of future activity have been less upbeat. Eurozone: The graphic below illustrates the public’s attitudes toward the European Monetary Union (EMU). China: This chart shows China’s mobile …
Continue reading “The Daily Shot Brief – October 28th, 2020”
Greetings, Equities: Stocks sold off on Monday amid rising COVID threat and stimulus uncertainty. Forecasters now don’t expect to see stimulus legislation before next year. The put/call ratio jumped as investors bought downside protection. Credit: CDS auction recoveries (defaulted debt) have been extremely low this year, dominated by leveraged retailers with broken business models. …
Continue reading “The Daily Shot Brief – October 27th, 2020”
Greetings, United States: The preliminary Markit PMI report showed robust business activity in October. Services’ performance (2nd chart) exceeded forecasts. Japan: Asset managers are increasingly long the yen (which is often used as a macro hedge). China: China’s exports to the US and the trade surplus are at record highs. Energy: …
Continue reading “The Daily Shot Brief – October 26th, 2020”
Greetings, United Kingdom: Realizing that the earlier proposal will disincentivize employers from holding on to part-time workers, the government amended its jobs support scheme. The new incentive structure is much more attractive for employers and will result in fewer job losses (but much higher government spending). The schedule below from Pantheon Macroeconomics provides …
Continue reading “The Daily Shot Brief – October 23rd, 2020”
Greetings, Equities: Here is the correlation between the S&P 500 and the US GDP. Credit: Despite elevated default risks, US CCC-rated corporate bond spreads are near pre-crisis levels. Energy: Gasoline demand is weakening again. Eurozone: Italy’s new COVID cases exploded over the past couple of weeks. United States: The World …
Continue reading “The Daily Shot Brief – October 22nd, 2020”
Greetings, Rates: Markets are preparing for another massive US stimulus bill and the Treasury debt issuance spike that will follow. The Fed has been steadily buying Treasuries and MBS bonds, but that’s not enough to absorb all the new supply. Is there sufficient appetite at the FOMC to repeat the April buying blitz? …
Continue reading “The Daily Shot Brief – October 21st, 2020”
Greetings, United States: US trucking fleets have been shrinking. As inventories tightened this year, demand for shipments boosted truck freight rates. United Kingdom: Banks are concerned about a spike in consumer delinquencies. Equities: Uncertainty around stimulus and the 1987 crash anniversary put some pressure on stocks on Monday. Rates: Fed officials have …
Continue reading “The Daily Shot Brief – October 20th, 2020”
Greetings, United States: Consumer sentiment is grinding higher. Eurozone: Eurozone sovereign yields have been drifting lower. Emerging Markets: The black-market Argentine peso discount to the official exchange rate continues to widen. Demand for US dollars keeps climbing. Equities: Increased retail activity boosted demand for low-price stocks. Credit: Implied volatility in …
Continue reading “The Daily Shot Brief – October 19th, 2020”
