Via Calculated Risk: Special Notes on GM Strike and the Decennial Census: The GM strike ended in October, and 46,000 workers were on strike during the BLS reference week in October. These workers returned to their jobs in November, and this should boost employment gains for November. Decennial Census: In August and September, the Census Bureau increased
Via the NYT: Michael R. Bloomberg is actively preparing to enter the Democratic presidential primary and is expected to file paperwork this week designating himself as a candidate in at least one state with an early filing deadline, people briefed on Mr. Bloomberg’s plans said. Mr. Bloomberg, the former New York City mayor and billionaire businessman, has
Via the excellent Damian Boey at Credit Suisse: With the Fed recently suggesting that it is done cutting rates for now, it was interesting to observe the market reaction to October payrolls and ISM data. To re-cap: US non-farm payrolls came in above expectations, rising by 128K in October, with 95K worth of upward revisions
Via FTAlphaville: Hedge funds are worried about Elizabeth Warren. On Monday, famed investor Paul Tudor Jones warned a crowd at the Robin Hood Conference that if Warren wins the 2020 election the S&P 500 index will drop 25 per cent. Yikes. Jones’ warning follows similar sentiments from Leon Cooperman, the billionaire founder of Omega Advisors, who told Politico:
Via the excellent Damien Boey at Credit Suisse: Ahead of this week’s Fed meeting, many commentators are now debating whether officials will deliver a hawkish cut. Money markets are suggesting that the Fed is near-certain to cut rates by 25bps (90%+ probability), with the only question being whether its forward guidance is hawkish or dovish.
Via Politico: The top U.S. envoy to Ukraine told House impeachment investigators on Tuesday that President Donald Trump sought to withhold critical military aid to Ukraine and refuse a White House meeting with the country’s president until it pursued politically-motivated investigations into Trump’s rivals. The diplomat, William Taylor, painted a damaging portrait of events that
Via The Guardian: Donald Trump pushed the United States towards a constitutional crisis on Tuesday when his legal counsel said the White House would refuse to cooperate with Congress’s impeachment inquiry. “Given that your inquiry lacks any legitimate constitutional foundation, any pretense of fairness, or even the most elementary due process protections, the Executive Branch
Via the ABC: US presidential contender Bernie Sanders has been forced to cancel campaign events until further notice after undergoing an unexpected heart procedure following sudden ill health, according to an adviser. The 78-year-old was in Las Vegas, Nevada, on Tuesday (local time) for 2020 presidential campaign events when he experienced discomfort and was taken to a
Via Rabobank: Summary The Democrats in the House of Representatives have decided to start impeachment proceedings against President Trump. While impeachment is possible as the Democrats have a majority in the House of Representatives, conviction is unlikely as long as the Republicans in the Senate continue to support their President. In this case the removal
You need to know because this: Here’s her full policy position run down from Wikipaedia: Economy[edit] Warren believes that America has both a short-term and a long-term jobs problem.[citation needed] Warren notes that China spends 9% of its GDP on infrastructure, and Europe spends about 5% of GDP, while the US is spending only 2.4% and is looking
Via Damien Boey at Credit Suisse: US existing home sales surprised to the upside, rising by 1.3% in August, taking year-ended growth higher to 2.6% from 0.6%. Housing demand was looking weak at the end of 2018, but now it seems to be turning around, largely in response to lower bond yields and mortgage rates.
Via the excellent Damien Boey at Credit Suisse: The Fed delivered a “hawkish” easing this morning, cutting the Fed funds rate by 25bps to 1.75-2%, and the interest rate on excess reserves by 30bps to 1.8%. Importantly, officials reiterated their “median” guidance for no more rate cuts this year. Interestingly, there were three dissenters –
The Iranian conflict is more or less over before it began, via CNN: President Trump said Wednesday that his administration would be announcing sanctions on Iran “over the next 48 hours.” He also said that his “thinking pretty much remains the same” on the recent attack on Saudi Arabia. Trump, speaking on a Los Angeles
Via the excellent Damien Boey at Credit Suisse: Over the past few days, we have seen chaos in US money markets. Repo rates on general collateral (ie secured borrowing rates) have spiked higher to as high as 10%. The New York Fed has been forced to intervene, conducting a $53 billion overnight “system” repo to
Via the excellent Damien Boey at Credit Suisse: US non-farm payrolls came in below expectations, rising by only 130K in August, compared with expectations for 160K gain. Compositionally, private payrolls added only 96K, compared with expectations for 150K job creation. Interestingly, many economists expected stronger gains for August because of Census-related hiring. But overshadowing this,
Via Calculated Risk: Special Note on Decennial Census: Temporary Decennial Census hiring will probably impact the August employment report with the Census hiring as many as 40,000 temporary workers. The headline number should be adjusted for these hires, see: How to Report the Monthly Employment Number excluding Temporary Census Hiring On Friday at 8:30 AM ET, the BLS
Via Bloomberg: President Donald Trump sought to prod China into doing a trade deal before the U.S. presidential election in November 2020, or face even more difficult negotiations during his potential second term. “Think what happens to China when I win,” Trump said in a tweet on Tuesday. “Deal would get MUCH TOUGHER!” Trump said
Another domino falls in the end of cycle shock, via WSJ: Bankruptcies are rising in the U.S. oil patch as Wall Street’s disaffection with shale companies reverberates through the industry. Twenty-six U.S. oil-and-gas producers including Sanchez Energy Corp. and Halcón Resources Corp. have filed for bankruptcy this year, according to an August report by the law firm Haynes & Boone LLP.
A few tidbits on the US corporate bond market from BofAML: Summer 2019 snapshot of the US HG market. The US high grade (HG) corporate credit market has expanded to an $8.293tn asset class, including $7.959tn of bonds and $0.334tn of derivatives notional outstanding. Supply. HG new issuance volumes have averaged $1.258tn per
Via Domain: In late July, the United States Studies Centre and YouGov polled 1,820 Australians and 1,800 Americans. We find Australians strongly prefer a Democratic win in 2020, a result replicated across almost all demographic and political groups. Only about one in five Australians prefer a second term for the Trump administration. Indeed, fewer than
Because the last batch just two years ago worked so well, at Politico: In public, President Donald Trump and top White House officials keep extolling the strength of the U.S. economy. In private, they’re increasingly worrying about a global economic slowdown triggering a U.S. recession — and weighing options to shore up the economy ahead
Via the excellent Damien Boey at Credit Suisse: Overnight, bonds rallied strongly again, partly because of investor nervousness about geo-political risks and slowing growth. Within the stock market, bond proxies and quality exposures outperformed again, while value stocks underperformed. Yet interestingly, we are actually seeing the forward-looking economic data improve: Both the New York and
Via Michael Pettis: On July 31, 2019, U.S. Senators Tammy Baldwin and Josh Hawley submitted a bill “to establish a national goal and mechanism to achieve a trade-balancing exchange rate for the United States dollar, to impose a market access charge on certain purchases of United States assets, and for other purposes.” According to an earlier memo that further
Via Morgan Stanley: Don’t Blame the Fed or Trade – It’s the Fundamentals Rarely has the adage “Don’t fight the Fed” been more apropos than over the past 18 months. In 2018, the Federal Reserve’s aggressive tightening contributed to a bear market for most stocks, while this year’s equally aggressive dovish pivot has resulted in
From the IEA: Source: U.S. Energy Information Administration, Annual Electric Generator Report and Preliminary Monthly Electric Generator Inventory Between 2010 and the first quarter of 2019, U.S. power companies announced the retirement of more than 546 coal-fired power units, totaling about 102 gigawatts (GW) of generating capacity. Plant owners intend to retire another 17 GW of coal-fired capacity by
Via the excellent Damien Boey at Credit Suisse: Bond and money market investors, as well as the Fed, have been keeping tabs on debt ceiling negotiations. Officially, the fear has been that if legislation were to not change, the US government would “run out of money” by September, causing shutdown and “default”. The official narrative
By Damien Boey at Credit Suisse: Over the past few days, we have witnessed some very confusing signals from Fed officials: Vice Chair Clarida suggested that the Fed should not wait until things get so bad to have a dramatic series of rate cuts. These comments followed and potentially reinforced dovish comments from the New
by Chris Becker Stock markets are renowned for pricing in promises but failing to deliver on accuracy. With US markets now at record highs, with the Dow Jones breaking through the 27000 point barrier last night as the S&P500 hovers at a near doubling of its GFC low, and a Federal Reserve hell bent
by Chris Becker The latest inflation figures from the US may have thrown a spanner in the works of an easing Fed, upsetting bond markets overnight. More from CNBC: U.S. underlying consumer prices increased by the most in nearly 1-1/2 years in June amid solid gains in the costs of a range of goods and services,
Damien Boye at Credit Suisse has his take on the Powell Put overnight: Overnight, Fed Chair Powell delivered the dovishness the market was looking for, but had not fully priced in. He suggested that: Many FOMC members were talking about cutting rates in June. The dip in inflation may not be so transitory, as initially
