Greetings, Credit: Let’s begin with the Fed’s Senior Loan Officer Opinion Survey. Given the strength in the housing market, banks have been easing lending standards on mortgages. Consumer credit demand (credit cards, auto loans, etc.) has rebounded. Equities: A substantial increase in Treasury yields could pose a risk for growth stocks, especially the …
Continue reading “The Daily Shot Brief – November 12th, 2020”
Greetings, United States: With more employees working from home, companies are increasingly trying to sublease office space (flooding the market). Despite the rally in office REITs (see chart), this sector will continue to struggle. Eurozone: Greek short-term bond yields have moved into negative territory. China: China’s tech shares have reversed the recent …
Continue reading “The Daily Shot Brief – November 11th, 2020”
Greetings, Equities: Stocks rallied sharply on the US election outcome and vaccine news. The Dow surged nearly 3%, boosted by financials and energy. Credit: US business loan balances continue to shrink as companies pay down their revolving facilities and refinance loans in the capital markets. China: The latest five-year plan reflects a shift …
Continue reading “The Daily Shot Brief – November 10th, 2020”
Greetings, Equities: The market is pleased with Biden’s electoral win and reduced uncertainty (for now). Stock futures are up sharply in early trading. The collapse in vol (less uncertainty) has been supporting the post-election bounce, according to Deutsche Bank. The put-call ratio declined last week. Rates: The 10-year Treasury futures volume spiked in …
Continue reading “The Daily Shot Brief – November 9th, 2020”
Greetings, Credit: Corporate bonds saw substantial inflows this week as Treasury yields tumbled. This chart shows states’ revenue shortfall this year. Since significant support from the federal government is unlikely at this point, it’s a bit surprising to see further strength in the muni market this week. Alternatives: Macro hedge funds are …
Continue reading “The Daily Shot Brief – November 6th, 2020”
Greetings, Equities: A “blue wave” is not likely as Republicans seem to retain Senate control. Here is what this means for the markets. Republicans in the Senate have no appetite for a massive stimulus bill. With the year-end income cliff approaching (see this chart/comment from Oxford Economics), the Fed is now more likely to step in …
Continue reading “The Daily Shot Brief – November 5th, 2020”
Greetings, United States: While the US election is still too close to call, as of 3:00 AM EST, the betting markets were projecting a victory for President Trump. Treasury yields tumbled due to lower chances of a massive fiscal stimulus package. Eurozone: Based on the ECB’s official communications, the central bank has …
Continue reading “The Daily Shot Brief – November 4th, 2020”
Greetings, United States: Mortgage originations hit a multi-year high. The housing boom has been powered by borrowers with credit scores of 750 and above. United Kingdom: The UK economic outlook has worsened since the last MPC meeting. China: China is allowing greater access to its onshore futures market. This makes it …
Continue reading “The Daily Shot Brief – November 3rd, 2020”
Greetings, United States: According to BCA Research, the US needs another $1.5 trillion in government stimulus just to maintain a neutral “fiscal thrust.” Here is what we could expect from a Biden/Democratic “clean sweep,” according to Morningstar. Europe: Here is the stock market performance in October. Commodities: The gold/S&P 500 ratio is …
Continue reading “The Daily Shot Brief – November 2nd, 2020”
Greetings, United States: The economy rebounded in the third quarter, with the GDP climbing 33% (the highest increase on record). This chart shows quarterly changes in consumer spending on goods and services. Eurozone: The ECB is getting a bazooka ready for December. China: While money supply and credit continue to improve, monetary …
Continue reading “The Daily Shot Brief – October 30th, 2020”
