Afleveringen
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China and Japan selling record amounts of Treasuries. Do they hate the dollar? Donald Trump? You and me? Not only will we answer the questions, while those countries saw huge selling of USTs, curiously the Cayman Islands got a truly massive deposit of them and it showed up during July, August and September. Seems very carry trade-y.
Eurodollar University's Money & Macro Analysis
https://www.eurodollar.university
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A double whammy on US consumers. First, the government issued an alarming update to the biggest jobs data there is. Then retail giant Target stunned with its Q3 results and more so its guidance for Q4. The thing is, both of those are related; two sides of the macro coin. The one says the summer started really badly, the other it didn't get better.
Eurodollar University's Money & Macro Analysis
Reuters Target raises 2024 profit forecast as price cuts draw shoppers
https://www.reuters.com/business/retail-consumer/target-raises-annual-profit-forecast-after-price-cuts-boost-quarterly-sales-2024-08-21/CNBC Target shares plunge 20% after discounter cuts forecast, posts biggest earnings miss in two years
https://www.cnbc.com/2024/11/20/target-tgt-q3-2024-earnings.htmlBloomberg Target Shares Tumble After Retailer Cuts Profit Outlook
https://www.bloomberg.com/news/articles/2024-11-20/target-tgt-trims-profit-outlook-on-inventory-buildup-higher-costsCNN As Americans bargain shop, six-figure earners flock to Walmart
https://www.cnn.com/2024/11/19/investing/walmart-stock-earnings/index.htmlhttps://www.eurodollar.university
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Zijn er afleveringen die ontbreken?
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Warren Buffett continues to sell tens of billions worth of stocks. Everyone wants to know why. This divergence between major stock index most likely holds the answer. Normally stock indexes don't mean much beyond their beauty, yet they can be important signals at times like now when they do diverge in such an obvious and sustained way. This is a key cyclical one, too.
Eurodollar University's Money & Macro Analysis
CNBC Berkshire Hathaway’s cash fortress tops $300 billion as Buffett sells more stock, freezes buybacks
https://www.cnbc.com/2024/11/02/berkshire-hathaways-cash-fortress-tops-300-billion-as-buffett-sells-more-stock-freezes-buybacks.htmlFranklin-Templeton
https://www.franklintempleton.com/articles/equity-markets/the-foundry-quandary-owning-semis-late-in-the-cycleDeloitte Industry Outlook
https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/semiconductor-industry-outlook.htmlhttps://www.eurodollar.university
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The Federal Reserve reported a sharp rise in delinquencies, especially credit cards and auto loans. That wasn't all, as the New York branches also showed record high rejections strongly indicating where things really stand in the credit cycle. As a result, we have to pay some attention to CRTs, otherwise known as SRTs, the latest financial engineering akin to the 2020s version of credit default swaps.
Eurodollar University's Money & Macro Analysis
FRBNY Household Debt and Credit Report Q3 2024
https://www.newyorkfed.org/microeconomics/hhdc/background.htmlBloomberg Ally Auto Borrowers With 2022 Loans Now Struggling, CFO Says
https://www.bloomberg.com/news/articles/2024-11-07/ally-auto-borrowers-with-2022-loans-now-struggling-cfo-saysBloomberg Ally’s Charge-Offs, Bad-Loan Provisions Beat Expectations
https://www.bloomberg.com/news/articles/2024-07-17/auto-lender-ally-reports-stronger-than-expected-debt-managementFederal Reserve Frequently Asked Questions about Regulation Q
https://www.federalreserve.gov/supervisionreg/legalinterpretations/reg-q-frequently-asked-questions.htmhttps://www.eurodollar.university
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Another retailer finds out the 2021 "recovery" was mostly an illusion. Prices may have soared and revenues looking good, it didn't last because it couldn't. As the company closes hundreds of stores and prepares to lay off an unknown number of workers, more stats show this is no isolated case. The cycle continues and continues to take its toll on businesses and workers alike.
Eurodollar University's conversation w/Steve Van Metre
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The yen and the euro are good currency indicators of global monetary conditions, but there are a couple even better and more consistent signals. When the 'dollar' goes up and these two are taking the hit because of it, that's when you really need to pay attention. It's not Trump, Jay Powell, interest rates or just random chance.
Eurodollar University's Money & Macro Analysis
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The dollar index jumped to a more than two-year high leaving everyone to ask why. Some say Trump, others the Fed. They might as well have said it was Burger King (who blames Wendy's). Though the dollar is rising here in the short run, to really understand what's going on you have to consider more than just developments in November 2024. This has been in the works for several years.
Eurodollar University's Money & Macro Analysis
Reuters US dollar continues uptrend as Fed policy provides lift
https://www.reuters.com/markets/currencies/dollar-over-two-month-high-yen-near-150dlr-2024-10-15/Bloomberg Wall Street Sees Dollar Soaring More, But Splits on How Much
https://www.bloomberg.com/news/articles/2024-11-12/dollar-s-trump-fueled-rally-unites-wall-street-on-bullish-betshttps://www.eurodollar.university
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After Germany's governing coalition collapsed last week, the country's ZEW added more solid evidence about why that was. The ZEW also collapsed into November. That's not just about Germany since the "zoo" is really what the rest of the world looks like from the German perspective. That also has a lot to say about the ongoing Treasury selloff (just like April).
Eurodollar University's Money & Macro Analysis
ZEW November 2024
https://www.zew.de/en/press/latest-press-releases/falling-economic-expectations-after-trump-victoryBloomberg German Investor Confidence Slumps on Political Strife, Trump Win
https://www.bloomberg.com/news/articles/2024-11-12/german-investor-confidence-slumps-on-political-strife-trump-winhttps://www.eurodollar.university
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The economic challenges the incoming Trump administration is facing are far and away greater than those confronted in 2016. From the cyclical standpoint, 2024 has far more in common with 2001. While structurally, there's nothing close to this in generations. Amidst the election euphoria there needs to be sober analysis.
Eurodollar University's Money & Macro Analysis
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Repo fails jumped by 50% in the latest weekly data, which just so happens to be the same week swap spreads plunged to record lows. It was also when the US economy, at least its labor data, took a turn for the worse. Understanding the connections between all these money and macro indications is critical.
Eurodollar University's Money & Macro Analysis
Financial Times New York Fed examines banks’ role in money market turmoil
https://www.ft.com/content/83a5bb70-dbca-11e9-8f9b-77216ebe1f17FOMC Chair Powell Press Conference Transcript October 2019
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20191030.pdfhttps://www.eurodollar.university
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Credit card usage isn't really about spending. Americans use their credit cards when they're confident about jobs and incomes. The latest data from the Fed contains a more serious warning especially how it lines up with jobs and income data...and the Fed's actions.
Eurodollar University's conversation w/Steve Van Metre
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Is there era of massive government "stimulus" finally over? Bonds are certain it is. The Chinese are doing their best to make sure that's the result, in large part because they don't know what to do. That much is becoming clear and the implications are already going global. Just ask anyone with oil.
Eurodollar University's Money & Macro Analysis
Bloomberg China Unveils $1.4 Trillion Debt Swap, Saves Stimulus for Trump
https://www.bloomberg.com/news/articles/2024-11-08/china-unveils-839-billion-debt-swap-to-rescue-local-governmentsBloomberg China Debt Plan Underwhelms Bond Market Betting on More Stimulus
https://www.bloomberg.com/news/articles/2024-11-08/china-bond-market-eyes-fiscal-plans-from-key-legislative-meetinghttps://www.eurodollar.university
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Germany's government is the latest casualty of the "vibecession." Amid a flurry of political activity, the markets throw up another major warning with the first ever negative swap spread. Predictably, the mainstream media can't make sense of swaps, the situation, or the economics. It's the economy, stupid.
Eurodollar University's Money & Macro Analysis
Bloomberg Germany’s Government Puts Itself Out of Its Misery
https://www.bloomberg.com/opinion/articles/2024-11-07/germany-s-coalition-government-puts-itself-out-of-its-miseryBloomberg Fear of German Debt Binge Flips Key Market Gauge for First Time
https://www.bloomberg.com/news/articles/2024-11-07/fear-of-german-debt-binge-flips-key-market-gauge-for-first-timeBloomberg Scholz Sees Germany Riding Out War in Ukraine Without Recession
https://www.bloomberg.com/news/features/2023-01-17/german-chancellor-olaf-scholz-on-2023-economic-outlook-war-in-ukrainehttps://www.eurodollar.university
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Huge moves, major negatives, and record declines for one of the most critical pieces of the entire global system. While election euphoria has gripped certain financial markets, this one is doing the opposite. It is a key warning about where everything stands before even considering whether or not Trump's victory changes anything.
Eurodollar University's Money & Macro Analysis
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Demand for gasoil, the basic fuel which runs the entire modern world, is actually declining. Having stumbled over the summer, this exceptionally rare development is another really negative sign to go with, relatedly, even more production and job cuts across the auto industry. Energy, autos, economy.
Eurodollar University's Money & Macro Analysis
Bloomberg Diesel Set For Growing Glut as Demand Falters
https://www.bloomberg.com/news/articles/2024-11-05/diesel-set-for-growing-glut-as-demand-faltersWorld Bank Commodity Markets Outlook
https://openknowledge.worldbank.org/server/api/core/bitstreams/bbda9ad3-4f12-4626-ad4b-94a4d20fbd52/contentBloomberg OPEC Cuts Global Oil Demand Growth Forecasts for Third Consecutive Month
https://www.bloomberg.com/news/articles/2024-10-14/opec-cuts-global-oil-demand-growth-forecasts-for-third-consecutive-monthOPEC June 2
https://www.opec.org/opec_web/en/press_room/7339.htmOPEC Sept 5
https://www.opec.org/opec_web/en/press_room/7369.htmOPEC Nov 3
https://www.opec.org/opec_web/en/press_room/7409.htmBloomberg Even Some High-Income Americans Can’t Afford New Cars Anymore
https://www.bloomberg.com/news/articles/2024-11-04/soaring-2024-new-car-prices-turn-more-buyers-toward-used-vehiclesNikkei Nissan cutting production of main U.S. models by 30%
https://asia.nikkei.com/Business/Automobiles/Nissan-cutting-production-of-main-U.S.-models-by-30Guru Focus Nissan Cuts Production Amid Declining U.S. Demand, Threatening Global Sales Goals
https://www.gurufocus.com/news/2582356/nissan-cuts-production-amid-declining-us-demand-threatening-global-sales-goalsEuroNews Thousands of jobs to go at German car parts maker Schaeffler
https://www.euronews.com/business/2024/11/05/thousands-of-jobs-to-go-at-german-car-parts-maker-schaefflerhttps://www.eurodollar.university
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Why are interest rates rising at one end of the yield at the same time falling on the opposite side? With more recession data coming in all the time, starting with payrolls, it seems as though there should be a uniform response from the marketplace. But that's not how steepening works.
Eurodollar University's Money & Macro Analysis
Washington Post
House Passes Bush Tax Cut
https://www.washingtonpost.com/archive/politics/2001/03/09/house-passes-bush-tax-cut/99152799-f156-414f-82c4-bed4fca05bb3/Time ‘The Worst Is Over’
https://time.com/archive/6917914/the-worst-is-over/https://www.eurodollar.university
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October payrolls were exceptionally weak, yet LT rates jump? With more rate cuts from the Fed basically assured, questions swirl around the Treasury selloff having many people wondering if there is a 'Trump trade' going on here. The answers are right there in front of us.
Eurodollar University's conversation w/Steve Van Metre
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
This isn't about October or hurricanes. Government just confirmed jobs market is in big f-ing trouble.
Eurodollar University's Money & Macro Analysis
BLS Employment Situation October 2024
https://www.bls.gov/news.release/archives/empsit_11012024.pdfCNN Messy October jobs report muddied by strikes and storms ahead of Election Day
https://www.cnn.com/business/live-news/us-jobs-report-october-11-01-24/index.htmlhttps://www.eurodollar.university
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The government's latest data confirms the dramatic slowdown sweeping across the labor market. We've been documenting hours being cut, quitters quitting quits, no one hiring, and now even a few layoffs. Not only do the latest figures back all that up, they also help explain consumer behavior and even the last GDP estimate.
Eurodollar University's Money & Macro Analysis
CNBC Ford guides to low end of 2024 earnings forecast as it slightly tops Wall Street’s third-quarter expectations
https://www.cnbc.com/2024/10/28/ford-motor-f-earnings-q3-2024.htmlFord Q3
https://media.ford.com/content/fordmedia/fna/us/en/news/2024/10/28/third-quarter-2024-financial-results.htmlChallenger Gray & Christmas October 2024
https://www.challengergray.com/blog/job-cuts-fall-in-october-2024-but-ytd-up-4-from-last-year/https://www.eurodollar.university
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Another seemingly solid US GDP report for the books thanks in large part to a huge allotment of missiles. Does this mean the soft landing has been achieved? Even if it has been achieved, we wouldn't know it from GDP data. Instead, history shows cyclical changes all look decent just before them. The latest quarterly data is not just comparable, it is, surprisingly, worse than every other period entering recession.
Eurodollar University's Money & Macro Analysis
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