Greetings,
The United States: Inflation will moderate next year as the massive oil price adjustment makes its way through the economy.
China: Slower credit expansion does not bode well for China’s economic activity next year.
The Eurozone: The market’s expectations for the timing of the ECB’s liftoff are getting pushed further out.
Credit: Below we have some stats on the US asset-backed commercial paper market (ABCP) which was at the epicenter of the financial crisis. In 2007, as mortgage defaults climbed, money market investors refused to roll these short-term debt obligations. Banks, who backstopped many of these ABCP programs, were forced to take the underlying securities (often tranches of securitized products) onto their balance sheets, boosting their direct exposure to sub-prime mortgage debt. The ABCP market is now dramatically different and much smaller.
Emerging Markets: The Philippine trade deficit will be a drag on the peso.
Global Developments: How many central banks are hiking rates vs. easing? The chart below includes a forecast for next year (CE = Capital Economics).
Food for Thought: Patent wars:
Edited by Joseph Cohen
To receive the Daily Shot Premium, you need to be a subscriber to The Wall Street Journal. The Daily Shot readers qualify for a special membership offer of $1 for 2 months and can join simply by clicking here.
If you are already a WSJ member, you can sign up for The Daily Shot at our Email Center by clicking here.
The Daily Shot Premium is also available online at DailyShotWSJ.com
If you have any issues at all, please contact a Customer Service representative by calling 1-800-JOURNAL (1-800-568-7625) or sending an email to support@wsj.com.
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.
We would also like to thank the Federal Reserve Bank of St. Louis for the incredible job they have done providing data and graphics to the public. Here is the credit and legal notice related to all FRED charts: FRED® Graphs ©Federal Reserve Bank of St. Louis. All rights reserved. All FRED® Graphs appear courtesy of Federal Reserve Bank of St. Louis. http://research.stlouisfed.org/fred2/
Contact the Daily Shot Editor: Editor@DailyShotLetter.com