US Economy

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Will the US fiscal cliff crash markets?

We have noted a few times recently that the US economy faces a hiccup later this year and early next as its fiscal stimulus growth pulse crashes with year-on-year comparisons. This goes to the often overlooked fact that when it comes to GDP growth inputs, it is the rate of change in spending that matters

1

What are the Biden tax proposals?

Goldman has a crack: The Treasury has released a new more detailed description of its corporate tax proposals. They are in line with the outline from the White House last week, but include a few new details related to the treatment of foreign income and the minimum tax on book income. Overall, Treasury estimates the

20

US travel continues resurgence

This is what happens when you have a competent government. Vaccines unleash pent-up demand. The US is entering a rude travel boom. Mobility is surging: Credit card spending on travel is surging: Boosted by stimulus: TSA numbers are climbing fast: My base case is that US travel overshoots this year and next as family, recreational

3

The full Biden infrastructure stimulus

Goldman has the details: 1. The White House proposes to spend roughly $2.2 trillion over ten years.  The Administration expects most of this spending to be complete after 8 years. This appears to be mostly new money with less double-counting of existing spending than in last year’s $1.5 trillion House bill.  Of the $2 trillion, around

12

US enters travel boom!

The evidence continues to accumulate that once populations are vaccinated they rush back into travel. A lot of fun is being had in US travel spending right now: Mobility is through the roof: Travel checkpoints are approaching the bottom of pre-COVID ranges: Likewise, hotel occupancy: It is my view that not only will travel rebound

3

UBS: Huge profits boom ahead

UBS is getting on board with the MB profits boom thesis based upon tearaway US growth, strong fiscal support, a global inventory rebuild and top-line growth landing on lean post-recession business: Revising S&P 500 target to 4250 on strengthening earnings expansion As equities de-rate amidst the jump in rates, much better than expected earnings should

35

A Biden boom of immense proportions

The Biden Administration is moving swiftly from emergency stimulus support to longer-term infrastructure spending to keep the US economy stronger for longer. Bloomberg has more: An overall spending package worth between $2-4tr will be proposed. It will focus on roads and green infrastructure. It will be funded by tax hikes for corporations from 21% to

13

Australian dollar slammed as Joe Biden’s America First takes shape

The Australian dollar was hit again on Friday night as the US dollar rallied with higher yields and commodities rolled over with tech stocks and emerging markets. All very typical market action. To the charts! DXY was up again as EUR eased: The Australian dollar dropped against DXY and other developed markets: Brent was soft

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What do consumers buy post-vaccination? Travel

BofA with a terrific little insight into what consumers buy the moment that they feel confident that they’ve seen off the virus: Post-vaccine behavior–generational data: We focus on spending trends amongst traditionalists which are aged 73–92 and are therefore most likely to have received the COVID vaccine. In particular, spending on airfare surged for traditionalists

7

US flogs the virus

BofA with the lastest charts: The latest update to University of Washington’s IHME Covid-19 model shows dramatic improvement in the trajectory for the US Covid-19 situation between now and the summer. They no longer predict another spike in daily infections due to the more infectious mutated variants, all that remains is a bump–i.e. a March

13

US economy boom builds

Readers will know that we have a very bullish outlook for the economic recovery this year. Indeed, we see the US at Chinese-style growth rates for the next year before coming off. The reasons for this are: An ongoing global inventory cycle in goods production that has American wholesalers and retailers short of stock. A

9

Goldman: Why the US economy won’t overheat

The trade de jour is the steepening yield curve and rising inflation. I have noted many times that the inflation narrative is much more cyclical than it appears owing to early cycle constraints that will fade relatively quickly into 2022. The other driver, so say the narrative, is MMT and runaway US fiscal support. Goldman

7

Will K-shaped inflation crash markets?

As we know, the world enjoyed an unprecedented K-shaped recovery last year as goods boomed via stimulus and work from home. But high tough services completely busted amid social distancing. Now, it is becoming plain that inflation trends are following exactly the same pattern. Via some great charts from The Daily Shot on the US

16

America whips the virus

It’s been a long and hard road including, in my view, the expression of Donald Trump’s revenge on the American people for giving him the boot, but the US is on track to whip COVID-19 by mid-year. Levels are still high but falling fast. Via BofA: The number of people hospitalized with COVID-19 in the

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The Trump impeachment video

House impeachment managers introduce video evidence as part of their case against Donald Trump, depicting one of the darkest days in American history. pic.twitter.com/7G2Jf1PEnQ — Josh Campbell (@joshscampbell) February 9, 2021 The trial begins. The ABC reports on possible outcomes: “It seems very likely that Trump will be acquitted,” Professor Ackerman said. “From the point

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BofA: US edging towards super-stimulus

Via BofA: As negotiations over the $1.9tr fiscal package continue, we are increasingly focused on the views of key swing voters in the Senate.•Atruly bipartisan deal will likely require support fromthe10 Republicans who have put forward a$618bn proposal. •The size of a Democrat-only bill will depend on what is acceptable to the most moderate Democrats—most

22

US is crushing the virus

BofA: The University of Washington IHME Covid-19 model estimates that daily Covid-19infections in the US peaked on December 23rdaround 340,000 and have since declined about 18%. In three months they estimate infections 70% off the peak, in line with the post-Labor Day low. That the number of infections peaked in December makes sense as we

0

MOAR US stimulus coming

Via Goldman: As expected, congressional Democrats released a budget resolution for FY2021 that, once passed, would give them the option to pass coronavirus relief legislation through the reconciliation process with a simple majority in the Senate without Republican support. After President Biden met with moderate Republican senators, the White House quickly signaled its support for