Greetings, The United States: Following the 75 bps rate hike Wednesday, the FOMC downgraded its GDP projections and boosted the forecasts for unemployment. The collateral damage from this inflation battle is now expected to be more severe, narrowing the path to a “soft landing.” The terminal rate expectations are back below 4%. …
The Daily Shot Brief – June 15th, 2022
Greetings, The United States: The small business outlook for general business conditions hit a record low in May Faced with a recession (as the chart above suggests), companies should, in theory, curtail hiring. Instead, hiring plans picked up in May. Perhaps the situation is not as dire as sentiment suggests. China: Economic activity …
The Daily Shot Brief – June 14th, 2022
Greetings, The United States: To begin, the Treasury curve inverted as short-term yields continued to soar on Monday. The market has massively repriced Fed rate hike probabilities amid concerns that inflation expectations are becoming unanchored. The probability of a 75 bps rate increase this week is suddenly almost a certainty, and the odds …
The Daily Shot Brief – June 13th, 2022
Greetings, The United States: The CPI report surprised to the upside again. The headline CPI index re-accelerated to hit a multi-decade high. While goods inflation is easing, food, energy, and core services CPI sped up last month. Also, the biggest problem for the Fed may not even be the CPI surprise. Instead, it could …
The Daily Shot Brief – June 10th, 2022
Greetings, The Eurozone: First, the ECB struck a hawkish tone, confirming the start of its first rate-hiking cycle since 2011. The July rate increase is now expected to be 25 bps (a more cautious start). The market now expects the ECB to deliver nearly 150 bps worth of hikes by the end of …
The Daily Shot Brief – June 9th, 2022
Greetings, The United States: To start, mortgage applications dipped to 2013 levels over the Memorial Day week. CoreLogic expects home price appreciation to cool but hold in positive territory. The United Kingdom: UK inflation is expected to outpace other advanced economies (and China) in 2022 and 2023. China: China’s exports rebounded in …
The Daily Shot Brief – June 8th, 2022
Greetings, The United States: Starting off, the consensus estimate for the core CPI in May is an increase of 0.5%. The markets could react violently if we get an upward surprise, especially if calls for more aggressive Fed rate hikes get louder. China: Hong Kong-based and foreign investors are returning to mainland equity …
The Daily Shot Brief – June 7th, 2022
Greetings, Asia – Pacific: To begin, the RBA delivered a 50 bps rate hike, spooking the markets Equities: In equity markets, sentiment has shifted to “risk-off” this morning after global bond yields jumped. The RBA’s outsize hike added to concerns about rising rates. The 10-year Treasury yield is back above 3%. Are …
The Daily Shot Brief – June 6th, 2022
Greetings, The United States: The jobs market held up better than expected in May. Also, prime-age labor force participation continues to rebound, which should ease wage pressures as more Americans return to work. The Eurozone: The gap between consumer and business confidence hit a record high this year. China: The stock market …
The Daily Shot Brief – June 3rd, 2022
Greetings, The United States: The recent decline in CEO confidence does not bode well for capital spending. The Eurozone: Germany’s economy is expected to underperform this year. Emerging Markets: Ukraine’s central bank has returned to the business of monetary policy, hiking rates to 25%. Energy: Next, US oil inventories surprised to …