Greetings, The United States: Consumer inflation expectations three years out hit a record low. This trend will add to the argument for waiting with the Fed rate hikes until next year. However, US financial conditions continue to ease despite the quarterly rate hikes. Some at the Fed will focus on this trend to argue …
Continue reading “The Daily Shot Brief – September 12th, 2017”
Greetings, The United States: Economists have bumped up their estimates for the third quarter GDP growth. Below is the consensus forecast over time. And here is the Atlanta Fed’s GDPNow. Credit: Investment-grade bond inflows remain robust, even as HY debt funds experience outflows. Energy: Crude oil and gasoline sold off on Friday, …
Continue reading “The Daily Shot Brief – September 11th, 2017”
Greetings, The United States:We’ve seen a significant divergence between total and prime-age labor force participation. Some of this is due to higher school enrollment rates among younger Americans. What else is going on? Credit: Leveraged loan issuance has been brisk this year. Energy: This chart shows the trend in solar installation costs. …
Continue reading “The Daily Shot Brief – September 8th, 2017”
Greetings, The United States: These scatter plots show the recent breakdown in correlation between economic growth and inflation. That’s why some FOMC members are calling for a pause in rate hikes. Credit: Global high-yield (HY) corporate bond issuance keeps climbing. Global Developments: Consumer sentiment and spending continue to diverge across advanced economies. …
Continue reading “The Daily Shot Brief – September 7th, 2017”
Greetings, The United States: The percentage of first-time homebuyers is on the rise. Homebuilders have been putting out more “starter” new homes (in blue and red). But those increases haven’t been sufficient to accommodate the demand from first-time homebuyers. China:Is the softening credit impulse telling us that China’s economy will weaken in the months to …
Continue reading “The Daily Shot Brief – September 6th, 2017”
Greetings, The United States: The regional Fed surveys have been pointing to a solid national manufacturing report. Indeed, the August ISM index reached the highest level since 2011. The NY Fed Nowcast model indeed showed an increase in the GDP projection as a result of the ISM data. China: With the currency stable, foreign …
Continue reading “The Daily Shot Brief – September 5th, 2017”
Greetings, The United States: The tremendous damage to the Houston-area economy will create a temporary drag on the US GDP. • The Houston metro area economy is one of the largest in the US. • In fact, by itself, the Houston-area GDP is greater than the economy of Sweden or Poland. China: China’s property markets …
Continue reading “The Daily Shot Brief – September 1st, 2017”
Greetings, The United States: The second-quarter GDP revision also surprised to the upside. The consumer carried the day again (in blue). Credit: This chart shows banks pulling out of corporate leveraged loans, as institutions (such as BDCs, CLOs, credit funds, hedge funds, etc.) pile into the market. Global Developments: This chart shows …
Greetings, The United States: The US airline industry has been doing well recently. However, the Hurricane Harvey disaster has pushed jet fuel prices sharply higher amid shut refinery operations. Some suggest that airline ticket prices will soon rise as a result. Turning to the corporate sector, this chart shows the time series analysis of …
Greetings, The United States: How did the various economic metrics respond to natural disasters in the past? Credit: Small corporate loans (under $100mm) have been experiencing lower default rates. This is partially due to smaller firms having limited access to leverage. Equity Markets: We are in for a volatile Tuesday as North …
