Greetings, United States: GDP growth weakened last quarter, but economists expect a rebound in Q4. United Kingdom: Four hikes by June? Europe: Natural gas prices appear to be rolling over. Cryptocurrency: $3.1 billion of bitcoin options are set to mature on Friday, which could be a source of volatility. The top …
Continue reading “The Daily Shot Brief – October 29th, 2021”
Greetings, United States: Holiday sales are expected to exceed $800 billion this year. Canada: The BoC struck a hawkish tone, ending QE and pulling forward rate hikes. This is exactly the type of move that is flattening yield curves around the world. China: The property developers’ deleveraging process is going to be …
Continue reading “The Daily Shot Brief – October 28th, 2021”
Greetings, United States: Market-based inflation expectations are climbing. The 10yr breakeven rate reached 2.7% for the first time since 2006. The stock market is also betting on higher inflation. The Horizon Kinetics Inflation Beneficiaries ETF has been outperforming. Europe: EU gas demand depends mainly on the weather. The current supply situation, according to …
Continue reading “The Daily Shot Brief – October 27th, 2021”
Greetings, United States: The nation’s capital expenditures have been relatively slow since the pre-financial-crisis trend. US fixed assets are rapidly aging. Combined with labor shortages, these trends point to robust business investment ahead. Europe: This chart shows homeownership rates in the EU. China: China’s urbanization rate is increasing but at a …
Continue reading “The Daily Shot Brief – October 26th, 2021”
Greetings, United States: Next, we have some updates on inflation. Based on economic data, there is plenty of slack in the US economy. As a result, inflation should moderate. However, when production capacity and labor utilization are constrained by supply instead of demand, one should recalibrate the measures of slack. Wage growth is likely …
Continue reading “The Daily Shot Brief – October 25th, 2021”
Greetings, China: Long-term correlation between China’s government bonds and Treasuries has been climbing since the financial crisis. Eurozone: What are the polls and the betting markets telling us about the French presidential election? United States: Options markets are pricing in a higher probability of inflation exceeding 3% over a longer period. …
Continue reading “The Daily Shot Brief – October 22nd, 2021”
Greetings, United States: Here are some updates on inflation. TIPS breakevens (market-based inflation expectations) keep climbing, with the 5-year rate hitting a multi-year high. The amount of “excess” liquidity in the economy is staggering, which will continue to be a tailwind for inflation. Here is the M2 money supply vs. the pre-COVID trend. …
Continue reading “The Daily Shot Brief – October 21st, 2021”
Greetings, United States: Residential construction eased in September, with single-family housing starts and construction permits dipping below last year’s levels. Europe: Which countries are most dependent on Russian natural gas? China: Beijing is trying once again to curb coal prices. Part of the problem is the disconnect between coal and electricity …
Continue reading “The Daily Shot Brief – October 20th, 2021”
Greetings, United States: Here are the reasons for the lack of urgency in returning to work. Canada: Four BoC rate hikes by the end of Q3 of next year? The market is convinced. Eurozone: Economists are boosting inflation forecasts. The CPI – PPI spread has blown out, which could squeeze corporate profit …
Continue reading “The Daily Shot Brief – October 19th, 2021”
Greetings, United States: Global inflationary trends (combined with robust US consumption) are causing the market to reevaluate the Fed’s actions over the next few years. The market is increasingly convinced that the Fed will be forced to hike twice next year. Moreover, the market sees the central bank becoming more aggressive over the next …
Continue reading “The Daily Shot Brief – October 18th, 2021”
