The Daily Shot Brief – August 21st, 2017

Greetings,

 

The United States: As discussed previously, the recent dollar weakness will result in higher import prices.

Source: Capital Economics

In particular, prices of industrial supplies and materials are expected to rise.

Source: Deutsche Bank, @joshdigga

On the other hand, the dollar’s weakness should help boost US exports.

Source: Capital Economics

 

Bitcoin: Bitcoin’s global trading volume has been climbing rapidly. It’s now comparable to some liquid ETFs.

Source: BofAML

 

Equity Markets: At this point, the possibility of a comprehensive corporate tax reform has been priced out of the market. This chart shows companies who will benefit the most from lower taxes trading at a discount to the broader market.

Source: BofAML

But has the market been too pessimistic on tax legislation? After all, US companies are still hopeful.

Source: BofAML

Even without a comprehensive reform, a one-time repatriation of capital seems likely. What will corporations do with that cash once they bring it to the US? Here are the results of the Merrill Lynch Risk Management Survey. Many of the actions below could give stocks a boost.

Source: BofAML

 

The Eurozone: Financial conditions in the Eurozone remain easy despite the recent euro rally.

Source: TD Securities

 

Emerging Markets: The Capital Economics investment flows tracker suggests massive portfolio inflows into EM Asia (and to a lesser extent Lat Am).

Source: Capital Economics

 

Global Developments: This chart shows the widening gap between the overnight rates implied by the Taylor Rule and the actual central bank policy rates. The central banks are not tightening policy in tandem with the economic improvements.

Source: Capital Economics

 


Food for Thought: Confederate monuments map.

 

Source: @axios; Read full article

Edited by Joseph N Cohen


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Thanks to Josh Marte (@joshdigga), Matt Garrett (@MattGarrett3), Joseph Cohen (@josephncohen), Ycharts.com, S&P Global, and Moody’s Investors Service for helping with the research for the Daily Shot.

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