The United States: Here, we have the case for and against rate cuts by the Fed (see chart below).
– The case for:
• Manufacturing recession
• Tumbling inflation expectations
• The inverted yield curve
• A strong US dollar
• Global economic uncertainty
– The case against:
• The stock market near records
• Elevated risk appetite (tight credit spread, etc.)
• Extremely low unemployment rate (below the longer-term sustainable levels)
• Improving global leading economic indicators
• Relatively stable underlying inflation rates
The Eurozone: The latest ECB easing expectations boosted periphery nations’ credit. Below is Portugal’s credit default swap spread, which is now below 50 basis points.
Equities: The news of Trump and Xi planning to have an ‘extended’ meeting at the G-20 sent stocks sharply higher. Here is the Dow Jones Industrials Average.
Global Developments: Lately, central banks around the world have only been cutting rates (no hikes).
Food for Thought: Building permits per 1000 people:
From our sponsor:
Edited by Joseph N 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 firstname.lastname@example.org.
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