Greetings, United States: Starting off, consumer inflation reached a multi-year high after a surge in gasoline prices last month. Emerging Markets: Next, Sri Lanka is defaulting on its foreign debt. Energy: Fitch expects oil prices to average around $90-$100/barrel over the next year as lower exports from Russia reduce global supplies. Equities: Which …
The Daily Shot Brief – April 12th, 2022
Greetings, United States: To begin, inflation expectations in the US remain anchored, with the one- and three-year indicators continuing to diverge. Rates: The recent drawdown in the US Treasury market has been extreme. Equities: In equity markets, historical trends illustrate the consequences beyond the bond market of severe Treasury drawdowns. Eurozone: Economists …
The Daily Shot Brief – April 11th, 2022
Greetings, Rates: In the US, real rates are surging as the 10-year TIPS yield approaches zero. This trend is particularly troubling for growth stocks. Equities: Next, the equity risk premium continues to tighten in the US. Did US indices bottom on March 8th? This chart shows bear market rallies during the 2007-2009 timeframe. …
The Daily Shot Brief – April 8th, 2022
Greetings, Administrative Update: Please note that The Daily Shot Brief will not be published next Friday, April 15th. The United States: In the US, housing market sentiment has deteriorated to multi-year lows, according to Fannie Mae. The Eurozone: The ECB continues to get surprised by the euro-area inflation spike, raising the market’s rate …
The Daily Shot Brief – April 7th, 2022
Greetings, The United States: The FOMC minutes confirmed the Fed’s quantitative tightening program aims to trim its Treasury holdings by $60 billion, and its MBS holdings by $35 billion, per month. At some point, the Fed will sell MBS debt outright because the runoff is expected to be too slow to meet the reduction …
The Daily Shot Brief – April 6th, 2022
Greetings, The United States: Treasury yields advanced further this morning with news of faster quantitative tightening, which the stock market could no longer ignore. For now, strong household balance sheets are expected to be a tailwind for spending. Europe: Next, high corporate debt makes French firms more vulnerable to rising rates. Russia: The …
The Daily Shot Brief – April 5th, 2022
Greetings, The United States: To begin, let’s take a look at a comparison between today’s inflation trends and previous inflation spikes. Europe: Amid the Russia-Ukraine crisis, European nations are finding it increasingly difficult to navigate their dependency on Russian oil. This chart shows Europe’s energy burden relative to the U.S. China: While the authorities …
The Daily Shot Brief – April 4th, 2022
Greetings, The United States: First, the payrolls report solidified the yield curve inversion. The curve inversion doesn’t mean recession is imminent. The lead time from the 2s/10s inversion can range from seven months to 33 months. Europe: Inflation continues to surge across Europe, partially driven by a 45% increase in the Energy CPI …
The Daily Shot Brief – April 1st, 2022
Greetings, The United States: Based on the recent wage growth trend, the Fed could push rates above 4%. Europe: April is historically a good month to be long European shares. China: The Markit PMI confirmed the official figures showing manufacturing contraction in March amid lockdowns. Cryptocurrency: Bitcoin is outperforming the S&P …
The Daily Shot Brief – March 31st, 2022
Greetings, Eurozone: In the Eurozone, as German and Spanish consumer inflation reaches multi-decade highs, the ECB will be under pressure to act sooner and move faster. Here are the market’s expectations for rapid rate hikes. The United States: Recovery from the pandemic has seen surging airline sales in the US despite hiccups caused by the …