The United States: Analysts are not convinced that the US-China trade war has been averted. Most believe that “the can has been kicked down the road,” and the trade deficit with China will only continue to worsen over the next few years. Here is the forecast from Capital Economics.
Also, even before the latest trade “agreement,” US oil exports to China already hit record levels. It’s worth noting that China can quickly cut the official trade deficit with the US by buying more American crude oil and quietly reselling it into the market. Crude oil does not have a “made in the USA” stamp on it. While such a move would cut the imbalance with China, the US trade deficit with the world would not improve.
The Eurozone: Investors have become nervous about European shares in general. Here is the 3-month 90/110% vol ratio (skew):
Energy: Shale energy firms are still reporting negative cash flow despite higher oil prices.
Equity Markets: There are still too few bearish investors.
Credit: Companies have shifted their liabilities to longer maturities to reduce refinancing risks.
Rates: The dollar continues to diverge from the rate differentials.
On the other hand, the yield curve steepness differentials go the other way (the US curve is flatter).
Food for Thought: What job would make it worth moving to a different city? And which city?
Edited by Joseph Cohen
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