Greetings, United States: Bloomberg’s consumer comfort indicator points to further deterioration in sentiment. But the levels remain well above the 2008 lows. Part of the reason is that household balance sheets were much healthier going into this downturn than what we saw before the financial crisis. Eurozone: Euro-area firms depend much more on …
The Daily Shot Brief – April 16th, 2020
Greetings, Energy: Crude oil storage facilities are getting filled quickly. Also, the slump in global liquids production this year will be unprecedented. Credit: US banks’ credit loss provisions are piling up. Also, junk bond ETFs now trade at a premium to their net asset values (NAV). Rates: Central banks are …
The Daily Shot Brief – April 15th, 2020
Greetings, United States: Many households will not be able to manage their high-interest auto loans. Also, the airline industry is in deep trouble. Europe: UK government spending and gilt issuance will spike in the months to come. Will the BoE boost its QE program to absorb all the new debt? …
The Daily Shot Brief – April 14th, 2020
Greetings, United States: The budget deficit widened further in March. But last month’s increase was just the tip of the iceberg. The budget gap is expected to exceed WW-II levels this quarter, according to Nomura. Below is an estimate from Fitch for the full year. Eurozone: The Eurozone GDP contraction will depend on …
The Daily Shot Brief – April 13th, 2020
Greetings, United States: Let’s begin with the labor market. Over six million Americans filed for unemployment the week ending April 4th. If the unemployment rate climbs to 15% (as recently projected by Goldman Sachs), we could be looking at 5.5 million past-due mortgages, according to Black Knight. China: Economic activity has been rebounding. …
The Daily Shot Brief – April 9th, 2020
Greetings, United States: Mortgage applications to purchase a home continued to decline last week. Also, refinance applications are off the highs but remain elevated. On a bright side, most layoffs so far have been classified as “temporary.” Eurozone: German government bond issuance will more than double from the previous Q2 plans, …
The Daily Shot Brief – April 8th, 2020
Greetings, United States: Here is a comparison of the potential GDP trajectory vs. the previous recession. Eurozone: German industrial production is expected to deteriorate, but not all sectors will be severely impacted. China: The PBoC has been lowering policy rates. And the market expects further cuts. Here is the 2-year swap rate. …
The Daily Shot Brief – April 7th, 2020
Greetings, United States: The speed of the Federal Reserve’s securities purchases has been unprecedented. The chart below compares the current quantitative easing (QE) trajectory to previous programs. Will the Fed’s balance sheet reach $9 trillion? According to BofA Global Research, the Fed will fully fund the massive 2020 deficit. It’s the US version of …
The Daily Shot Brief – April 6th, 2020
Greetings, Administrative Update Please note that the Daily Shot will not be published this Friday, April 10th. United States: The US lost about 700k jobs (Morgan Stanley’s forecast was spot on). Given the initial unemployment claims figures, the March report was just the tip of the iceberg. Commodities: Funds have dramatically shortened their exposure to commodities. …
The Daily Shot Brief – April 3rd, 2020
Greetings, United States: Bank of America now sees the GDP contracting by over 10% for the whole year. Eurozone: The number of new infections in Italy is gradually trending lower. China: The PMI report from Markit shows China’s service-sector business activity still in decline (PMI < 50), but the rate of contraction …