The United States: Wages are rising faster at smaller US firms.
Rates: The market-implied probability of a third Fed rate hike this year dipped below 40%.
Credit: The Moody’s stressed/distressed corporate credit universe has been gradually shrinking.
Equity Markets: Valuation models show diminishing equity risk premium (vs. bonds). Fed officials have expressed concerns about this trend.
Energy Markets: The chart below shows the “fiscal breakeven” for major oil exporters. Below these oil price levels, the governments of these countries run a deficit. This breakeven point has been moving lower for many exporters as their governments do some belt tightening.
Emerging Markets: Venezuela’s FX reserves continue to dwindle.
More investors are preparing for debt restructuring as time is running out.
The Eurozone: The economies of smaller Eurozone nations have been outperforming.
Global Developments: Finally, here is the Moody’s financial stress scenario for all the major banking systems around the world.
Food for Thought: Some college majors have high employment rates but meager wages.
Have a great weekend!
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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