Greetings, The United States: To begin, initial jobless claims hit another multi-year low, again running significantly below pre-COVID levels (2nd panel). Despite the headwinds, companies are unwilling to lay off employees (for now) given that it’s been so challenging and expensive to hire/retain workers. Multiple leading indicators suggest that inflation should be lower. …
Continue reading “The Daily Shot Brief – September 30th, 2022”
Greetings, The United Kingdom: The BoE terminal rate (maximum expected rate in this cycle) surged after the budget announcement. Energy: The gas pipeline sabotage sent European gas prices higher. Presumably, the goal of this sabotage was to deprive Europe of natural gas flows before the winter heating season begins so gas rationing could swing …
Continue reading “The Daily Shot Brief – September 29th, 2022”
Greetings, The United States: New home sales were shockingly strong last month. This improvement will likely be reversed shortly. Surging Treasury yields made commercial real estate much less attractive. As the economy slows, cap rate increases will be driven by lower property prices. The capitalization rate is calculated by dividing a property’s net operating …
Continue reading “The Daily Shot Brief – September 28th, 2022”
Greetings, The United States: First, most economic indicators experience varying degrees of positive growth during the two quarters prior to a recession. However, immediately following the onset of a recession, all indicators simultaneously decline. The drawdown in US equity and fixed income markets has been extreme. Equities: The percentage of S&P 500 names …
Continue reading “The Daily Shot Brief – September 27th, 2022”
Greetings, The United States: The S&P Global PMI report showed surprising resilience in the nation’s business activity. Manufacturing orders are back in growth territory. The United Kingdom: The UK government announced a massive stimulus package. A massive amount of extra debt will be hitting the markets. The surge in yields after the budget announcement was …
Continue reading “The Daily Shot Brief – September 26th, 2022”
Greetings, The United States: While the private sector of the labor market has rebounded from the pandemic, state and local government job growth has lagged behind. A key reason for lagging public-sector labor supply recovery is sluggish wage growth. A significant component of this trend are public school teachers, many of whom are not returning …
Continue reading “The Daily Shot Brief – September 23rd, 2022”
Greetings, The United States: To start, the FOMC dot plot was hawkish, with projections pushed well above market expectations for the end of 2023. In the housing market, affordability is deteriorating rapidly as mortgage rates continue to surge. The United Kingdom: The pound is hitting multi-decade lows vs. USD. China: The World Economics …
Continue reading “The Daily Shot Brief – September 22nd, 2022”
Greetings, The United States: Housing starts were stronger than expected, boosted by a surge in multifamily construction. Bank deposits declined sharply last quarter. The Eurozone: Germany’s producer price report was a shocker. The surprise came from electricity prices, driven by unprecedented gains in the cost of natural gas. China: Chinese companies raised …
Continue reading “The Daily Shot Brief – September 21st, 2022”
Greetings, The United States: To begin, home prices are declining on a month-over-month basis for the first time in a decade. ANZ, Deutsche Bank, and several other research groups see the terminal federal funds rate closer to 5%, which is needed to kick rates into restrictive territory. Equities: Here is how equity …
Continue reading “The Daily Shot Brief – September 20th, 2022”
Greetings, The United States: FedEx shares plummetted 21% on Friday. What does that tell us about the economy? China: Foreign direct investment remains robust, a multi-year high for this time of the year. Emerging Markets: Russia’s central bank cut rates again. Equities: Here’s last week’s performance by sector. Rates: Speculative accounts …
Continue reading “The Daily Shot Brief – September 19th, 2022”
