Greetings, United States: Morgan Stanley expects Congress to pass a $1.5-2.0 trillion “CARES 2” stimulus package in September. The result will be a substantial boost to consumption (chart below) and GDP growth. All this additional liquidity is likely to give another boost to the stock market. It will also have a positive …
Continue reading “The Daily Shot Brief – September 9th, 2020”
Greetings, United States: There has been a substantial increase in households that “sometimes or often” go hungry. Many can’t cover basic expenses. United Kingdom: The pound has been under pressure as Brexit concerns resurface. Commodities: Industrial commodities buyer activity has accelerated in August. Energy: The Saudis cut oil …
Continue reading “The Daily Shot Brief – September 8th, 2020”
Greetings, Equities: The market finally saw a healthy adjustment, as the dealers’ short gamma exposure exacerbated the selloff (the same effect that created the melt-up). The tech mega-cap shares sold off. Social media lit up with retail traders discussing their losses. • Reddit But no worries. Individual traders got a taste for quick gains in the options …
Continue reading “The Daily Shot Brief – September 4th, 2020”
Greetings, Equities: Let’s begin with the options market where the speculative fervor is on full display. Speculative demand for call options (mostly deep out-of-the-money contracts) has been staggering (2 charts). Short-term call options are notoriously difficult to hedge, and dealers who sold them rapidly become short the market as shares rise (and the probability …
Continue reading “The Daily Shot Brief – September 3rd, 2020”
Greetings, Administrative Updates 1. Please note that The Daily Shot, as well as the Daily Shot Brief, will not be published on Monday, September 7th. 2. Please contact Help@TheDailyShot.com for any technical or account-related issues/questions. 3. Administrative updates are published on our website here. United States: Permanent layoffs have been relatively low. But Americans are quite concerned …
Continue reading “The Daily Shot Brief – September 2nd, 2020”
Greetings, Administrative Updates 1. Please note that The Daily Shot, as well as the Daily Shot Brief, will not be published on Monday, September 7th. 2. Please contact Help@TheDailyShot.com for any technical or account-related issues/questions. 3. Administrative updates are published on our website here. United States: Longer-term inflation expectations continue to climb. The market is increasingly convinced that …
Continue reading “The Daily Shot Brief – September 1st, 2020”
Greetings, Administrative Updates 1. Please note that The Daily Shot, as well as the Daily Shot Brief, will not be published on Monday, September 7th. 2. Please contact Help@TheDailyShot.com for any technical or account-related issues/questions. 3. Administrative updates are published on our website here. United States: Americans are moving into lower-density communities within their metro areas. Regional mortgage …
Greetings, United States: For the first time in years, the Fed announced a new approach to inflation targeting. The central bank will now focus on price levels rather than the rate of change. Moreover, the Fed will put a higher emphasis on the health of the labor market. The markets reacted by pushing longer-term …
Greetings, United States: According to JP Morgan, credit/debit card spending hasn’t been significantly impacted by the loss of unemployment benefits. However, the situation could change if there is no additional stimulus after the White House program ($300/week) expires. Japan: According to Barclays Research, Japan’s households “face a slide in disposable income due to …
Greetings, United States: Is the rout in rail freight ending? Even the extra $300 payments (as opposed to $600 paid earlier) will fully replace many Americans’ lost incomes. Eurozone: Consumers are starting to make major purchases – possibly using some of their savings. Asia – Pacific: According to Natixis, “a stronger …
