Greetings, United States: Credit and debit card spending in Pacific states is lagging the rest of the country. United Kingdom: Here is a quote from Macrobond on the UK’s trade with the EU. … we can see that Germany was the UK’s biggest trading partner in terms of service exports, while France was …
Continue reading “The Daily Shot Brief – September 16th, 2020”
Greetings, United States: Analysts are starting to have doubts about a CARES 2 stimulus package this year. Here are the aggregate probabilities from superforecasters. The concern is that cutting off the stimulus checks could reverse the recent economic gains. At this point, the recovery is already slowing, making it vulnerable to a shock. …
Continue reading “The Daily Shot Brief – September 15th, 2020”
Greetings, United States: The US fiscal 2020 budget gap hit $3 trillion. The trajectory going forward will depend on whether we see a CARES 2 package. The good news is that the government’s interest burden is expected to decline over the next few years, helped by extraordinarily low Treasury yields. China: Bond yields …
Continue reading “The Daily Shot Brief – September 14th, 2020”
Greetings, United States: The latest weakness in the US dollar has been good for smaller US manufacturers by helping them compete on price. Smaller industrial firms have outperformed (the equal-weight stock index below gives smaller industrial firms more weight). Since we are on the topic of currencies, the dollar-yen volatility market is pricing …
Continue reading “The Daily Shot Brief – September 11th, 2020”
Greetings, United States: The Indeed job postings indicator is still 19% below last year’s level. This scatterplot shows employment recovery vs. peak-to-trough employment loss by state. According to Deutsche Bank, more than half of those on temporary layoff have been unemployed for 15 weeks or longer. Many of these temporary layoffs will be “converted” …
Continue reading “The Daily Shot Brief – September 10th, 2020”
Greetings, United States: Morgan Stanley expects Congress to pass a $1.5-2.0 trillion “CARES 2” stimulus package in September. The result will be a substantial boost to consumption (chart below) and GDP growth. All this additional liquidity is likely to give another boost to the stock market. It will also have a positive …
Continue reading “The Daily Shot Brief – September 9th, 2020”
Greetings, United States: There has been a substantial increase in households that “sometimes or often” go hungry. Many can’t cover basic expenses. United Kingdom: The pound has been under pressure as Brexit concerns resurface. Commodities: Industrial commodities buyer activity has accelerated in August. Energy: The Saudis cut oil …
Continue reading “The Daily Shot Brief – September 8th, 2020”
Greetings, Equities: The market finally saw a healthy adjustment, as the dealers’ short gamma exposure exacerbated the selloff (the same effect that created the melt-up). The tech mega-cap shares sold off. Social media lit up with retail traders discussing their losses. • Reddit But no worries. Individual traders got a taste for quick gains in the options …
Continue reading “The Daily Shot Brief – September 4th, 2020”
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”
