Via Stethoscope on Rome: Rome’s streets are empty, the supermarket shelves loaded with food. My fellow denizens, for once free of the tourist hordes, are enjoying their lives in a state of limbo, waiting for coronavirus to come crashing down around their heads before they start stocking their larders and hunkering down. At least that’s
Via Damien Boey at Credit Suisse: Central bankers seem quite averse to cycles and volatility. By corollary, they seem extremely keen to bail out passive investors. But why? Overnight, the Fed cut rates by 50bps, and investors responded unkindly. Equities sold off aggressively, and volatility (VIX) rose to 36.8% from 33.4%. The 10-year bond yield
The US now has 108 reported cases and nine reported deaths. The latter suggests the fomer is out by a factor of ten. Check this CNBC video out to discover why: COVID-19 is in the US and already spreading fast. 1.5m new test kits are on their way and numbers will rise fast in the
Via Ambrose Evans-Pritchard: Three weeks ago there was much talk of a “Chernobyl moment” for China’s Communist Party, discredited by totalitarian attempts to suppress news of the spreading coronavirus in Wuhan. But fast-moving events can play wicked tricks, especially on a White House allergic to scientific facts. The new coronavirus, or COVID-19, is more likely
The old enemy is back and thank god for it, via Domain: They left it until the very last minute, and they may not have gone in nearly hard enough. But the Democratic Party’s presidential contenders finally got around to targeting frontrunner Bernie Sanders for his big-spending policies, patchy record on gun control and praise
Via Domain: If you turn on a television set in America for even a short amount of time you will see an advertisement for Bloomberg’s presidential campaign. There he is working with Barack Obama to tackle gun violence. There he is touting his success at shutting down coal-fired power plants. There he is declaring, without
Hysterical rubbish is exploding around the candidacy of Bernie Sanders in the US presidential election. It’s led off here today by an apoplectic Greg Sheridan: Could Bernie Sanders possibly be president? He’s 78, a self-declared socialist who wants a revolution in US politics, a left-winger who wants to abolish private health insurance, make tertiary education
Via FTAlphaville: The Federal Reserve’s chair Jay Powell has been at pains to point out recent bloating of the bank’s balance sheet does not constitute fresh quantitative easing. Chart, via FRED: Powell’s Fed views the expansion, which comes as the result of its purchases of short-term t-bills, as a consequence of its attempts to lower
Via Fox: White House officials are scrambling to produce an election year fiscal stimulus plan that is likely to include tax cuts to juice the economy and stock market ahead of the 2020 presidential contest, FOX Business has learned. The stimulus would be a way to have an alternate message to the proposals from nearly
From Bloomie: The U.S. House of Representatives impeached President Donald Trump on charges of abuse of power and obstructing Congress, the culmination of an effort by Democrats that further inflamed partisan tensions in Washington and deepened the nation’s ideological divide. The historic votes on Wednesday evening, which won the support of almost all Democrats in
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
