Greetings, United States: Business and consumer confidence indicators have diverged. United Kingdom: New COVID cases are falling. China: Short-term rates keep climbing. This is certainly one way to delever the financial system. Here is the 10yr yield vs. the overnight rate. Equities: VIX has diverged from the 30-day historical volatility. …
Continue reading “The Daily Shot Brief – January 29th, 2021”
Greetings, Equities: GameStop’s market value hit $24 billion. As a demonstration of just how distorted the market has become, here is the share price of a relatively small Australian mining company called GME Resources. The good news for the miner is that it has the same ticker symbol as GameStop (but in Australia), and …
Continue reading “The Daily Shot Brief – January 28th, 2021”
Greetings, Equities: The S&P 500 realized correlation is dangerously low. Rates: US government bond overnight repo rates are back in negative territory as money markets are flooded with liquidity. Commodities: China’s steel mills are losing money. China: China dominates the world’s lithium-ion battery supply chain. United Kingdom: Businesses are concerned …
Continue reading “The Daily Shot Brief – January 27th, 2021”
Greetings, Equities: Encouraged by the Reddit group r/wallstreetbets (and other online discussion boards), retail traders caused a massive short-squeeze in GameStop shares. The practice of targeted short-selling appears to have been permanently altered. Credit: Supported by the Fed’s purchases, agency MBS debt continues to rally. MBS spreads have tumbled going into the year-end, pushing …
Continue reading “The Daily Shot Brief – January 26th, 2021”
Greetings, United States: Existing home sales were quite strong in December. The second chart shows the year-to-date cumulative trends. The number of US homes for sale is at multi-decade lows. United Kingdom: The government’s support for the job market is expected to climb further, … … pushing borrowing beyond £400bn this year. …
Continue reading “The Daily Shot Brief – January 25th, 2021”
Greetings, United States: The Philly Fed’s manufacturing report showed solid factory activity in the region, exceeding market expectations. The report also showed manufacturers facing some price pressures, which they are passing on to their customers. United Kingdom: The CBI report showed UK manufacturers struggling with the confluence of the pandemic and Brexit. …
Continue reading “The Daily Shot Brief – January 22nd, 2021”
Greetings, United States: Fed communications remain highly focused on employment and household spending instead of inflation. By holding down rates, the US central bank has allowed the federal government to massively increase its debt without incurring higher interest expenses. Will the Fed sustain this trend as the US implements another fiscal stimulus package? …
Continue reading “The Daily Shot Brief – January 21st, 2021”
Greetings, United States: Consumer delinquency rates have been creeping higher in recent months. However, US household leverage hit a multi-decade low last year. Eurozone: France’s retail sector has taken a massive hit due to renewed lockdown measures. Asia-Pacific: Home sales point to further gains in Australia’s residential construction. China: State-owned …
Continue reading “The Daily Shot Brief – January 20th, 2021”
Greetings, United States: The fiscal package proposed by President-elect Biden is almost as big as the CARES Act. A new stimulus program of this size will turbo-charge economic growth and take the US to “full employment” by the fall of 2022, according to Moody’s Analytics. Eurozone: Italy’s Conte is trying to hold …
Continue reading “The Daily Shot Brief – January 19th, 2021”
Greetings, United States: The U. Michigan consumer sentiment index declined this month. The Republican-Democrat expectations gap continues to widen. Eurozone: Italy’s GDP contracted again in Q4 and will see another decline this quarter, according to Prometeia. Commodities: Commodities had an impressive run since last March. Equities: The Bespoke Investment’s “ludicrous” indicator …
Continue reading “The Daily Shot Brief – January 18th, 2021”
