Greetings, Equities: The market is behaving as if the coronavirus problem is all but gone. The assumption is that the vaccine will be available soon, will be effective, and most people will be inoculated. There is, however, a substantial risk associated with each of these assumptions. • Vaccine timing remains uncertain. • COVID vaccine effectiveness …
Continue reading “The Daily Shot Brief – October 13th, 2020”
Greetings, Global Developments: This chart shows each central bank’s balance sheet as a percentage of the GDP. United States: Small business activity remains well below last year’s levels. US COVID-related hospitalizations are on the rise. China: Inflows into sovereign bonds remain high, which has been supporting China’s currency. Emerging Markets: With …
Continue reading “The Daily Shot Brief – October 12th, 2020”
Greetings, United States: According to Morgan Stanley, US households have built up substantial ‘excess’ savings. One trend that allowed many households to save more was the postponement of liabilities: eviction moratoriums, mortgage forbearance programs, and student loan deferment (chart below). China: Foreigners continue to increase their holdings of China’s domestic assets. …
Greetings, United States: Let’s begin with the FOMC minutes, which continued to show a dovish stance. Later this year, the Committee will debate if the pace of economic recovery warrants an increase in securities purchases. Fed officials have been increasingly focused on layoffs, which may guide their decision on quantitative easing. For now, inflation …
Greetings, United States: The negotiations to implement another stimulus package appear to be over for now. United Kingdom: EV sales are up sharply. Australia: Australia is facing a fiscal cliff. China: China continues to expand its influence through international organizations. Credit: This chart shows liquidations vs. reorganizations by firm size. …
Greetings, United States: Consumer inflation expectations have been overshooting the actual price gains. Europe: Despite the SNB’s efforts to keep the Swiss franc from appreciating, hedge funds continue to maintain net long positions. China: This chart shows US views on China (by political affiliation). Energy: US electricity production is the lowest …
Greetings, United States: Just as we saw in the Conference Board’s index, the updated September U. Michigan consumer sentiment report showed substantial improvements. United Kingdom: The UK’s economy has underperformed due to weak household spending. But retail sales have now fully recovered from the pandemic-induced slump, pointing to a rebound in economic growth. …
Greetings, Equities: The President and First Lady tested positive for COVID, sending jitters through the markets. Stock futures are heavy in early trading. The market-based probability of Pence winning the 2020 election jumped. Credit: ESG debt issuance hit records in Q3. Rates: Treasury bill supply is projected to decline into year-end. …
Greetings, Equities: Stocks rose on Wednesday, with futures climbing further on Thursday morning in response to a potential relief plan breakthrough This development is a necessary condition for the rally to continue. Credit: Projected global insolvencies in 2021: Energy: Energy shares continue to underperform. But the IEA crude oil demand forecast shows …
Greetings, United States: Higher consumer inflation tends to be good for profit margins. According to Morgan Stanley, CapEx plans have recovered. But small business spending is lagging. Europe: Online search activity for credit cards slumped in Europe, diverging from the US. In addition, the EU is proposing ambitious reductions in …
Continue reading “The Daily Shot Brief – September 30th, 2020”
