Greetings, Rates: Markets are preparing for another massive US stimulus bill and the Treasury debt issuance spike that will follow. The Fed has been steadily buying Treasuries and MBS bonds, but that’s not enough to absorb all the new supply. Is there sufficient appetite at the FOMC to repeat the April buying blitz? …
Continue reading “The Daily Shot Brief – October 21st, 2020”
Greetings, United States: US trucking fleets have been shrinking. As inventories tightened this year, demand for shipments boosted truck freight rates. United Kingdom: Banks are concerned about a spike in consumer delinquencies. Equities: Uncertainty around stimulus and the 1987 crash anniversary put some pressure on stocks on Monday. Rates: Fed officials have …
Continue reading “The Daily Shot Brief – October 20th, 2020”
Greetings, United States: Consumer sentiment is grinding higher. Eurozone: Eurozone sovereign yields have been drifting lower. Emerging Markets: The black-market Argentine peso discount to the official exchange rate continues to widen. Demand for US dollars keeps climbing. Equities: Increased retail activity boosted demand for low-price stocks. Credit: Implied volatility in …
Continue reading “The Daily Shot Brief – October 19th, 2020”
Greetings, United States: The US dollar’s weakness continues to put upward pressure on import prices. New unemployment applications are holding above one million per week. Eurozone: Banks continue to underperform. China: Rising interest rates and bond yields have been supportive of Chinese stocks. Energy: US gasoline demand is back at the lower …
Continue reading “The Daily Shot Brief – October 16th, 2020”
Greetings, China: Consumer inflation continues to moderate, with the September figures coming in below market expectations. Slower food inflation, particularly pork, has been dragging the headline CPI lower. China has made progress in rebuilding its pig population while also boosting pork imports. Eurozone: The rebound in industrial production stalled in August. Gains have …
Continue reading “The Daily Shot Brief – October 15th, 2020”
Greetings, United Kingdom: Many jobs are at risk from new restrictions. Asia-Pacific: Taiwan’s central bank is becoming increasingly concerned about the Taiwan dollar strength. Its interventions have become more aggressive, halting the rally. China: China is retaliating against Australia for supporting the Wuhan investigation. Here is China’s overall coal consumption. Equities: …
Continue reading “The Daily Shot Brief – October 14th, 2020”
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 …
