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 Please note that The Daily Shot, as well as the Daily Shot Brief, will not be published on Monday, September 7th. 2.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 Please note that The Daily Shot, as well as the Daily Shot Brief, will not be published on Monday, September 7th. 2.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 Please note that The Daily Shot, as well as the Daily Shot Brief, will not be published on Monday, September 7th. 2.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 …
Greetings, Equities: This scatterplot shows the average earnings surprise for Q2 vs. the year-over-year earnings growth rate (by sector). Rates: SOMA securities purchases over time: Will slower growth in the Fed’s balance sheet boost the dollar? Emerging Markets: Which bonds are most vulnerable to global inflation? United States: Many homeowners …
Greetings, Equities: The stock market is increasingly pricing in higher corporate taxes as the US elections approach. The underperformance of companies with the highest median tax rates has accelerated. Will volatility start to rise ahead of the US elections? Credit: Leverage (debt-to-EBITDA) has risen sharply this year. Energy: Brent contango (1st chart) …
Greetings, United States: After four weeks of declines, initial unemployment claims rose last week. China: The yield curve has flattened considerably since May. The PBoC has kept liquidity relatively tight and resisted lowering short-term rates. Energy: The US oil futures curve is in contango. And the time spread (price between contracts) should …
