The Daily Shot Brief – January 29th, 2020

Greetings,   Global Developments: Let’s begin with some updates on the coronavirus. Here is the Google search frequency for the word “coronavirus”: Preparedness for epidemic/pandemic:   China: Here is the distribution of China’s shadow-banking credit.   Eurozone: The ECB and other economists have been downgrading the euro-area inflation forecasts (PM = Pantheon Macroeconomics).   United States: …

The Daily Shot Brief – January 28th, 2020

Greetings,   Commodities: According to the BofAML FMS monthly survey, global fund managers started the year overweight commodities (highest in eight years). Based on the charts above, these positions didn’t work out well. Nonetheless, once the coronavirus scare eases, we may see a rebound in some commodity markets.   Equities: The VIX curve inverted on …

The Daily Shot Brief – January 27th, 2020

Greetings,   China: The Wuhan coronavirus continues to spread, with quarantines appearing to be much less effective than some had hoped (see story). While China’s markets are closed, stock futures are down over 5% today. And the offshore renminbi dropped sharply as well.   Eurozone: At the Eurozone level, manufacturing activity appears to be stabilizing …

The Daily Shot Brief – January 24th, 2020

Greetings,   United States: CPI volatility is low relative to asset price volatility. According to Morgan Stanley, dovish Fed policy chasing higher inflation is more likely to result in higher asset price inflation before we get to higher consumer inflation. And that could pose a risk to financial stability.   China: Although local state-owned enterprises (SOEs) are …

The Daily Shot Brief – January 22nd, 2020

Greetings,   United States: The growth in revolving consumer credit is falling behind the increase in wages. According to TS Lombard, this indicator typically spikes heading into a recession or periods of perceived economic stress.   China: The renminbi declined for the second day (chart below), and China’s stock market slumped (second chart) on worries …