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When governments panic
The -713k contraction in US private sector employment in March was as dire as expected, but after the approx +6.4m increase in initial unemployment claims already reported in the two weeks up to the 28th March, this represents merely an hors d’oeuvre to what is coming down the pipe, With only limited effective testing (including […]
Continue readingThe shape of things to come?
This QuickTake by Bloomberg video drive-thru of Wuhan paints an eeerily post-apocalyptic image that might be straight out of Twelve Monkeys or The Omega Man. My first reaction was to avoid any stock that needs to bring people together (restaurants, cinemas, airlines, event organisers, hotels etc) as the public reaction to this coronavirus is clearly […]
Continue readingRepo fixed – really?
Often referred to as the plumbing behind the financial markets, a better analogy for the US repo market would perhaps be as sausage making. That is because knowing how it’s made might deter one from having the confidence to consume it. With Federal Fund and repo rates both back down to within the Fed’s 1.50-1.75% […]
Continue readingChoices
“Everything is awesome” it seems for equities. An accommodating central bank, another goldilocks US jobs number, reducing trade tensions, de-escalating war drums in the Gulf and also reducing political risk as the US seems on track to follow the UK by keeping the fiscal crazies away from the government purse strings, when they go to […]
Continue readingAirlines – back to the old ‘normal’
Manipulating monetary conditions leads to bad investment decisions as we have seen with the airline industry. 18 months ago its principal trade body IATA was waxing lyrical about the industry, as were financial pundits. Unfortunately, they underestimated the impact that low funding costs would also have on margins and profits in a capital intensive industry […]
Continue readingJobs data pain for impeachment obsessed Democrats
Without power, all that’s left is pointless political posturing. Markets therefore should be content to suck up some short term central bank profligacy if it can deliver more solid jobs and wages data, as we’ve seen in November’s non-farm payroll data. But then again, perhaps voters will want to take a risk on an increasingly […]
Continue reading‘Moar’ central planning call by new ECB chief
“Moar, Moar and Moar” seems to be the message from the ECB’s new president, Christine Lagarde in her first speech in that role. ‘Moar’ EU and EMU, ‘Moar’ fiscal loosening and therefore ‘Moar’ monetary indulgence that will be needed to pay for it. Perhaps more worrying however, was the central planning sub-text running through this […]
Continue readingUS jobs growth – not ‘Yuge’, but good enough
Net private sector job adds in October of +131k, with average wages stabilising to +2.6% annualised and +3.0% YoY is about as close to a ‘Goldilocks’ scenario’ as one could reasonably expect in the current trade war. While perhaps disappointing for those hoping for further Fed easing, the October jobs data is not without its […]
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