Greetings, The United States: The combination of the Philly Fed and the NY Fed factory indices also signals an increase in the ISM PMI this month. United Kingdom: The pound’s strength and a lower probability that the BoE will cut rates any time soon sent market-based inflation expectations sharply lower. The greatest declines …
Continue reading “The Daily Shot Brief – October 18th, 2019”
Greetings, The United States: Mortgage applications for house purchases remain at multi-year highs. Mortgage refinancing activity is also elevated. United Kingdom: Shares of businesses focused primarily on the UK have become highly correlated to the pound. China: According to Goldman’s policy proxy, China’s fiscal policy has accounted for a large part of …
Continue reading “The Daily Shot Brief – October 17th, 2019”
Greetings, The United States: While household leverage (debt-to-income) is low compared to pre-recession levels, we should pay more attention to financial obligations, which include rent. The green line below shows that households’ total financial liabilities are now much larger relative to debt obligations. United Kingdom: Credit quality is declining for UK consumer services …
Continue reading “The Daily Shot Brief – October 16th, 2019”
Greetings, The United States: China is stalling on the “interim” trade agreement because Bejing feels that it has some leverage at this point. (PMI stands for Purchasing Managers Index which measures the general direction of a sector through surveys of purchasing managers) How much of the decline in the US labor share was due to trade …
Continue reading “The Daily Shot Brief – October 15th, 2019”
Greetings, The United States: Is the auto industry facing a glut of used cars? Canada: Scotiabank says that despite an all-time high household debt-service ratio and a near-record ratio of debt to personal disposable incomes, Canadians are still responding to lower market interest rates and strong labor markets by borrowing more. China: Trade …
Continue reading “The Daily Shot Brief – October 14th, 2019”
Greetings, The United States: Let’s begin with the CPI (Consumer Price Index) report, which was a bit softer than the market was expecting. These inflation figures are unlikely to deter the Fed from cutting rates again this month (the market is assigning a 78% probability that it will do so). Here are the monthly …
Continue reading “The Daily Shot Brief – October 11th, 2019”
Greetings, The United States: Some economists are concerned that eroding corporate profit margins can push the US into recession. Asia-Pacific: Japanese companies do not have the leverage issue seen in much of the developed world. China: The renminbi has been whipsawed by trade-related news. Equities: US equities tend to perform well during …
Continue reading “The Daily Shot Brief – October 10th, 2019”
Greetings, The United States: Lower interest rates have been helpful for consumption. Interest-sensitive durable goods (products that do not wear out in a short time like food) are having a larger contribution to US consumer spending. The United Kingdom: The UK’s productivity has been lagging. The Eurozone: Germany’s industrial production appears to …
Greetings, The United States: Auto loan delinquencies have been grinding higher in recent years (see definition of indirect loans). The United Kingdom: The nation’s farmers are expected to have their biggest harvest since 2015. There is pressure to sell as much as possible ahead of Brexit. The Eurozone: Sentix investor sentiment hit …
Greetings, The United States: Construction industry labor conditions have been much tighter compared to previous cycles. Labor shortages have been contributing to slower growth for housing starts. Eurozone: Economists continue to warn about German manufacturing job cuts ahead. Asian Pacific: Japan’s government pension investment fund (GPIF) continues to increase its holdings of …
