Greetings, United States: With employment costs rising quickly, the chances of the FOMC boosting rates by 50 bps rather than 25 bps in March hit 23%. A 125 bps total rate increase this year (five 25 bps hikes) is now almost a certainty, according to the fed funds futures market. China: The renminbi …
Continue reading “The Daily Shot Brief – January 31st, 2022”
Greetings, United States: The fourth-quarter GDP growth topped expectations. However, over 70% of the increase was due to companies building inventories. It remains to be seen if the demand will be strong enough to quickly absorb this increase. United Kingdom: The CBI report showed softer retail sales this month. China: The …
Continue reading “The Daily Shot Brief – January 28th, 2022”
Greetings, United States: As expected, the Federal Reserve signaled a rate hike in March. The market quickly boosted the odds of a 50 bps rate increase in March. And rate hikes are expected to keep coming. The probability of five 25 bps rate hikes this year is now above 90%. Asia-Pacific: Australia’s stock …
Continue reading “The Daily Shot Brief – January 27th, 2022”
Greetings, Equities: Stocks remained under pressure on Tuesday. It’s been a rough start to the year. Rates: Have market-based inflation expectations peaked for now? Cryptocurrency: A majority of financial and tech firms surveyed by Arca and Coalition Greenwich have been active in digital assets/blockchain for at least three years. Emerging Markets: …
Continue reading “The Daily Shot Brief – January 26th, 2022”
Greetings, Equities: After entering correction territory, the S&P 500 rebounded on Monday to finish up on the day. But futures are again heavy this morning. The risk of conflict in Eastern Europe continues to weigh on the market Credit: It’s been a tough start of the year for munis. Cryptocurrency: The …
Continue reading “The Daily Shot Brief – January 25th, 2022”
Greetings, Equities: It was a rough week for stocks globally. The number of Nasdaq stocks hitting 52-week lows surged. Rates: The US Treasury’s cash balances at the Fed have rebounded sharply after the debt ceiling was lifted. That’s pulling deposits out of the private sector. As a result, bank reserves declined sharply in …
Continue reading “The Daily Shot Brief – January 24th, 2022”
Greetings, Equities: The Dow and the Nasdaq 100 dipped below the 200-day moving average. The selloff in small caps continued. Here is the 10-year relative performance. Rates: Treasury yield increases were been driven by real rates this month. Commodities: Fund managers are very long commodities. China: Economists continue to downgrade their …
Continue reading “The Daily Shot Brief – January 21st, 2022”
Greetings, Equities: The Nasdaq Composite entered correction territory as investors dumped “long-duration” equities. High-multiple growth equities continue to be driven by real rates. Here is the post-IPO portfolio’s correlation with inflation-linked Treasuries. Cryptocurrency: Crypto-focused stocks have been selling off with bitcoin. China: The renminbi is grinding higher vs. USD amid strong exports …
Continue reading “The Daily Shot Brief – January 20th, 2022”
Greetings, Equities: Rising real yields continue to pressure stocks. Credit: Investment-grade corporate debt duration has been rising over the past couple of decades, making the market more vulnerable to rate increases. Large US corporate bankruptcies are increasingly filed in Houston courts. Rates: The Treasury curve continues to flatten at the longer …
Continue reading “The Daily Shot Brief – January 19th, 2022”
Greetings, United States: The 2-year Treasury yield broke above 1% as the market prices in faster rate hikes ahead. A 1% increase this year is now fully priced in. Canada: Will we see a BoC hike next week? The market is pricing in a 70%+ probability of such an outcome. The …
Continue reading “The Daily Shot Brief – January 18th, 2022”
