Greetings, United States: Last week’s softer economic data sent the Citi Economic Surprise index into negative territory. Asia-Pacific: According to Natixis, Japanese banks have survived without passing on negative interest rates to their clients. To maintain profitability, they boosted their commissions by selling mutual funds and doubled their share of overseas loans and …
Continue reading “The Daily Shot Brief – November 18th, 2019”
Greetings, Rates: The Fed’s balance sheet normalization (quantitative tightening) lasted about 21 months. Some 40% of this reduction has been reversed in just over two months. Credit: The ratio of high-yield (HY) to investment-grade (IG) spreads is climbing. It tells us that HY debt is underperforming IG on a spread basis. Equities: …
Continue reading “The Daily Shot Brief – November 15th, 2019”
Greetings, United States: Let’s begin with the CPI report, which showed no signs of inflation accelerating. The October headline CPI was a touch higher, with the increase driven by gasoline and medical care prices. The core CPI declined despite rising healthcare prices. United Kingdom: The market is pricing in a 33% chance of …
Continue reading “The Daily Shot Brief – November 14th, 2019”
Greetings, Equities: US value stocks are currently cheap relative to momentum stocks. Energy: Fitch expects overall demand for US natural gas to increase more than domestic consumption in the months ahead. Emerging Markets: The JP Morgan EM Currency Index is tumbling again. China: Beijing has been unwilling to sufficiently boost stimulus …
Continue reading “The Daily Shot Brief – November 13th, 2019”
Greetings, Equities: Investment newsletters have turned very bullish. Rates: The relationship between one-month realized and implied volatility for 10-year Treasury futures has deviated from trend. Emerging Markets: A large percentage of India’s labor force works in the “informal” economy. The Eurozone: German consumers are worried about the economy. The United …
Continue reading “The Daily Shot Brief – November 12th, 2019”
Greetings, China: China has further room to lower rates in order to stimulate mortgage lending. Europe: European savings rates climbed around the time the 10-year Bund yield went negative (not what central banks wanted to see). The United States: Consumer expectations remain bifurcated by political affiliation. Also, housing tends to have …
Continue reading “The Daily Shot Brief – November 11th, 2019”
Greetings, Rates: The probability of another rate cut this year dipped below 10% in response to the news of a potential US-China “interim” trade deal. Equities: This chart shows inflation-adjusted earnings per share for the Russell 3000 (broad US market). Energy: WTI crude oil usually rises when managed money short positioning is …
Continue reading “The Daily Shot Brief – November 8th, 2019”
Greetings, United States: The spread between the Conference Board’s and the U. Michigan’s present-conditions sentiment indices signals that we are in the late phase of the economic cycle. The United Kingdom: Here are some BoE policy rate scenarios from Capital Economics. China: Growth in construction starts peaked in mid-2018 and has been …
Continue reading “The Daily Shot Brief – November 7th, 2019”
Greetings, United States: The housing shortage in the US is getting worse. The United Kingdom: Government spending is expected to increase, no matter who wins the elections. Europe: Yield curves across Europe continue to steepen. Here is the Bund curve vs. a month ago. Asia-Pacific: Foreigners increasingly control Japanese stock trading. …
Continue reading “The Daily Shot Brief – November 6th, 2019”
Greetings, United States: The upcycle in hotel revenue per available room (RevPar) is nearing an end. The Eurozone: Executives remain gloomy about exports. China: The charts below compare household balance sheets for China and the US. – Assets: – Debt: – Savings: Emerging Markets: South Africa dodged the Moody’s downgrade bullet – for now. …
Continue reading “The Daily Shot Brief – November 5th, 2019”
