The Daily Shot Brief – April 28th, 2020

Greetings,

 

Energy: Crude oil is under pressure again as stockpiles approach physical storage capacity globally. June WTI futures are nearing $11/bbl.

Source: Daily Shot

 

Will inventories exceed maximum available storage capacity?

Source: Princeton Energy Advisors

 

Commodities: Processing plant closures continue to wreak havoc on US meat markets.

Source: @markets; Read full article

 

Meat processing margins have spiked.

h/t Michael Hirtzer

 

Equities: Hedge funds are positioned extremely defensively, which has provided support for the rally.

Source: Deutsche Bank Research

 

Credit: Banks’ holdings of “safe” assets have been elevated over the past decade.

Source: @WSJ; Read full article

 

Since the start of the crisis, banks reduced their holdings of Treasuries (selling them to the Fed) …

Source: FRED

 

… and increased their cash balances (the Fed credited their reserve accounts).

Source: FRED

 

Rates: Here is a summary of the Fed’s new credit facilities intended to maintain the flow of credit to the US economy. Utilization has been low thus far, but the Fed is expected to ramp these up.

Source: Oxford Economics

 

General-collateral repo rates are now negative as the Fed floods the market with liquidity.

Source: Daily Shot

 

Food for Thought: Support for the government’s expanding role:

Source: @WSJ; Read full article

Edited by Devon Lall

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Contact the Daily Shot Editor: Editor@DailyShotLetter.com

 

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