Greetings, United States: In an unprecedented market dislocation, the May NYMEX crude oil (WTI) contract hit negative $40 per barrel. With storage increasingly scarce, nobody wants to take delivery on the expiring contract. Oil implied volatility hit a record high. Equities: This could be the first time the S&P 500 registers five straight quarters of …
The Daily Shot Brief – April 20th, 2020
Greetings, United States: Morgan Stanley expects the unemployment rate to drop below 6% by the end of next year after hitting 15%. China: The percentage of overdue household loans has risen sharply. Energy: US crude oil dipped below $15/bbl on oversupply concerns. We are now near the lowest levels since 1999. Part …
The Daily Shot Brief – April 17th, 2020
Greetings, United States: Bloomberg’s consumer comfort indicator points to further deterioration in sentiment. But the levels remain well above the 2008 lows. Part of the reason is that household balance sheets were much healthier going into this downturn than what we saw before the financial crisis. Eurozone: Euro-area firms depend much more on …
The Daily Shot Brief – April 16th, 2020
Greetings, Energy: Crude oil storage facilities are getting filled quickly. Also, the slump in global liquids production this year will be unprecedented. Credit: US banks’ credit loss provisions are piling up. Also, junk bond ETFs now trade at a premium to their net asset values (NAV). Rates: Central banks are …
The Daily Shot Brief – April 15th, 2020
Greetings, United States: Many households will not be able to manage their high-interest auto loans. Also, the airline industry is in deep trouble. Europe: UK government spending and gilt issuance will spike in the months to come. Will the BoE boost its QE program to absorb all the new debt? …
The Daily Shot Brief – April 14th, 2020
Greetings, United States: The budget deficit widened further in March. But last month’s increase was just the tip of the iceberg. The budget gap is expected to exceed WW-II levels this quarter, according to Nomura. Below is an estimate from Fitch for the full year. Eurozone: The Eurozone GDP contraction will depend on …
The Daily Shot Brief – April 13th, 2020
Greetings, United States: Let’s begin with the labor market. Over six million Americans filed for unemployment the week ending April 4th. If the unemployment rate climbs to 15% (as recently projected by Goldman Sachs), we could be looking at 5.5 million past-due mortgages, according to Black Knight. China: Economic activity has been rebounding. …
The Daily Shot Brief – April 9th, 2020
Greetings, United States: Mortgage applications to purchase a home continued to decline last week. Also, refinance applications are off the highs but remain elevated. On a bright side, most layoffs so far have been classified as “temporary.” Eurozone: German government bond issuance will more than double from the previous Q2 plans, …
The Daily Shot Brief – April 8th, 2020
Greetings, United States: Here is a comparison of the potential GDP trajectory vs. the previous recession. Eurozone: German industrial production is expected to deteriorate, but not all sectors will be severely impacted. China: The PBoC has been lowering policy rates. And the market expects further cuts. Here is the 2-year swap rate. …
The Daily Shot Brief – April 7th, 2020
Greetings, United States: The speed of the Federal Reserve’s securities purchases has been unprecedented. The chart below compares the current quantitative easing (QE) trajectory to previous programs. Will the Fed’s balance sheet reach $9 trillion? According to BofA Global Research, the Fed will fully fund the massive 2020 deficit. It’s the US version of …
