Greetings, Rates: Investors are flooding into Treasury bills, rapidly shrinking their portfolio durations. T-Bill yields have turned negative.. Credit: Credit markets are under severe pressure. Here are high-yield bond spreads: And investment-grade bond spreads: Commodities: Precious metals continue to struggle as investors give up on safe-haven assets. Emerging Markets: EM outflows …
The Daily Shot Brief – March 18th, 2020
Greetings, United States: Online search activity related to filing for unemployment has soared in recent days. Asia-Pacific: Japan’s recession is deepening. Energy: US crude oil dipped below $27/bbl while Brent is below $29. We are now near the 2016 lows. Separately, Germany has been slowing its investment in wind turbines. …
The Daily Shot Brief – March 17th, 2020
Greetings, Equities: The spread between the S&P 500 dividend yield and the 10yr Treasury reached a new high. The market expects companies to start cutting dividends. Credit: Will firms have trouble rolling their maturing debt? Which sectors are most exposed? China: Economic activity is gradually recovering. The housing market has …
The Daily Shot Brief – March 16th, 2020
Greetings, United States: Goldman Sachs is predicting deep contraction in growth. Here is the attribution. United Kingdom: It was a rough week for the British pound. Eurozone:The coronavirus trajectories in Spain and Italy are outpacing China (for this phase in the epidemic). Energy: The Brent futures curve is deep in contango. …
The Daily Shot Brief – March 13th, 2020
Greetings, Equities: The S&P 500 plummeted almost 10% on Thursday, the worst one-day drop since 1987. VIX is near the 2008 highs. Credit: There was more pain in credit markets on Thursday. Here are High-yield (HY) and investment-grade (IG) CDX spreads: Rates: The spread between the 30yr mortgage rate and the 10yr …
The Daily Shot Brief – March 12th, 2020
Greetings, Credit: As we mentioned a few days ago (#5 here), the muni market looked frothy. High-yield muni bonds seemed particularly vulnerable. Well, the market finally cracked. Here is the ratio of AAA muni yields to the 10yr Treasury. Equities: The share of S&P 500 stocks trading above their 200-day moving average dipped …
The Daily Shot Brief – March 11th, 2020
Greetings, United States: Online search activity suggests that consumers are getting nervous as the number of new US coronavirus cases climbs (second chart). Eurozone: Can Italy contain the coronavirus? Unlike China, it has no ability to deploy an aggressive police state. For example, Italy’s decision to quarantine the whole country would …
The Daily Shot Brief – March 10th, 2020
Greetings, Equities: M&A activity has been surprisingly robust. Rates: The Fed decided to boost repo financing to make sure that money markets continue to function smoothly. Energy: Drilling at the largest US shale plays is unprofitable at current prices. Emerging Markets: Lebanon is defaulting. China: Airline passenger traffic remains depressed. …
The Daily Shot Brief – March 9th, 2020
Greetings, Energy: Crude prices crashed, plummetting some 30% in early trading. US crude (second chart) dipped below $30/bbl for the first time since 2016. The Brent curve moved deeper into contango (positive-sloping). Commodities: Gold continues to rally amid risk asset rout. Equities: The correlation between US stocks and crude oil has risen. …
The Daily Shot Brief – March 5th, 2020
Greetings, Administrative Update Reminder: The Daily Shot as well as The Daily Shot Brief will not be published tomorrow. United States: Non-manufacturing activity (ISM) strengthened in February, topping forecasts. Once again, all bets are off for March. The index of new orders jumped. United Kingdom: Gilt yields have been tumbling. China: The stock …
