Greetings, Credit: Corporate bonds saw substantial inflows this week as Treasury yields tumbled. This chart shows states’ revenue shortfall this year. Since significant support from the federal government is unlikely at this point, it’s a bit surprising to see further strength in the muni market this week. Alternatives: Macro hedge funds are …
Continue reading “The Daily Shot Brief – November 6th, 2020”
Greetings, Equities: A “blue wave” is not likely as Republicans seem to retain Senate control. Here is what this means for the markets. Republicans in the Senate have no appetite for a massive stimulus bill. With the year-end income cliff approaching (see this chart/comment from Oxford Economics), the Fed is now more likely to step in …
Continue reading “The Daily Shot Brief – November 5th, 2020”
Greetings, United States: While the US election is still too close to call, as of 3:00 AM EST, the betting markets were projecting a victory for President Trump. Treasury yields tumbled due to lower chances of a massive fiscal stimulus package. Eurozone: Based on the ECB’s official communications, the central bank has …
Continue reading “The Daily Shot Brief – November 4th, 2020”
Greetings, United States: Mortgage originations hit a multi-year high. The housing boom has been powered by borrowers with credit scores of 750 and above. United Kingdom: The UK economic outlook has worsened since the last MPC meeting. China: China is allowing greater access to its onshore futures market. This makes it …
Continue reading “The Daily Shot Brief – November 3rd, 2020”
Greetings, United States: According to BCA Research, the US needs another $1.5 trillion in government stimulus just to maintain a neutral “fiscal thrust.” Here is what we could expect from a Biden/Democratic “clean sweep,” according to Morningstar. Europe: Here is the stock market performance in October. Commodities: The gold/S&P 500 ratio is …
Continue reading “The Daily Shot Brief – November 2nd, 2020”
Greetings, United States: The economy rebounded in the third quarter, with the GDP climbing 33% (the highest increase on record). This chart shows quarterly changes in consumer spending on goods and services. Eurozone: The ECB is getting a bazooka ready for December. China: While money supply and credit continue to improve, monetary …
Continue reading “The Daily Shot Brief – October 30th, 2020”
Greetings, Equities: Stocks sold off sharply on Wednesday, with the S&P 500 giving up some 3.5%. Once we broke below 3400, the selloff intensified. Traditional risk mitigation/hedging strategies weren’t very effective on Wednesday for US investors. Treasuries didn’t budge: Neither did the Japanese yen: Energy: The January Brent contract is trading below $40/bbl. …
Continue reading “The Daily Shot Brief – October 29th, 2020”
Greetings, United States: Manufacturing momentum has carried over into the fourth quarter, with regional Fed indicators pointing to robust factory orders in October. Expectations of future activity have been less upbeat. Eurozone: The graphic below illustrates the public’s attitudes toward the European Monetary Union (EMU). China: This chart shows China’s mobile …
Continue reading “The Daily Shot Brief – October 28th, 2020”
Greetings, Equities: Stocks sold off on Monday amid rising COVID threat and stimulus uncertainty. Forecasters now don’t expect to see stimulus legislation before next year. The put/call ratio jumped as investors bought downside protection. Credit: CDS auction recoveries (defaulted debt) have been extremely low this year, dominated by leveraged retailers with broken business models. …
Continue reading “The Daily Shot Brief – October 27th, 2020”
Greetings, United States: The preliminary Markit PMI report showed robust business activity in October. Services’ performance (2nd chart) exceeded forecasts. Japan: Asset managers are increasingly long the yen (which is often used as a macro hedge). China: China’s exports to the US and the trade surplus are at record highs. Energy: …
Continue reading “The Daily Shot Brief – October 26th, 2020”
