Copy
The Daily Shot ®
Dear Friends,

Today, The Daily Shot newsletter begins its transition to being an exclusive benefit of a Wall Street Journal Membership. After November 18th, you will no longer be able to receive The Daily Shot unless you are subscribed to The Wall Street Journal.

All Daily Shot readers receive a special membership offer of $1 for 2 months and can join simply by clicking here

If you are already a WSJ member, you can sign up for The Daily Shot at our Email Center by clicking here. Once there, log in and follow the three simple steps below:

Step 1: Find the Daily Shot box and click the 'SIGN UP' button at the bottom of it
Step 2: Read and accept the terms
Step 3: Click the 'SIGN UP' button once more

Once again, If you are joining WSJ for the first time click here.  
If you are a current WSJ subscriber, click here.

If you have any issues at all, please contact a Customer Service representative by calling 1-800-JOURNAL(1-800-568-7625) or sending an email to support@wsj.com.

Index
Emerging Markets
Asia
The Eurozone
The United Kingdom
Europe
The United States
Global Developments
Foreign Exchange
Commodities
Equity Markets
Food for Thought





Emerging Markets


1. Let's begin with Brazil, where the debt-to-GDP ratio is rising faster than economists had been forecasting.



Investors remain unconcerned, however, as the nation's stock market continues to rally.



2. Argentina still faces enormous economic challenges as industrial production contracts, missing forecasts.



3. Mexico's GDP surprised to the upside, ...



... sending the peso higher despite better Trump victory odds (about 32%, up from around 20%).



4. The South African rand jumps 2.5% after charges against Gordhan are dropped.



Source: @WSJ; Read full article

5. Nigeria's FX reserves hit another multi-year low as the central bank battles to defend the currency. If oil prices don't recover sufficiently soon, this is not going to end well.



6. The Russian ruble takes another hit on weaker oil prices. As discussed before, this crowded trade unwind could look ugly.



7. The Ukrainian stock market has gone vertical as foreign money comes back in.





Back to Index




Asia


1. Hong Kong's money supply growth stabilizes suggesting potential growth improvements ahead. Is this a reflection of China's more stable economic trends.



2. South Korea's retail sales see the largest monthly decline in years.



3. Japanese government bond (JGB) trading volumes collapse as several market makers exit while the central bank dominates the market.

Source: @fastFT; Read full article



Back to Index




The Eurozone


1. The euro area CPI is gradually pulling out of the disinflationary environment - for now.



2. On the other hand, Italy unexpectedly slips back into deflation.



3. Speaking of Italy, the massive rally in Banca Monte dei Paschi shares was short-lived. The bank continues to look for potential strategic investors.



4. German retail sales surprised to the downside. Global economic uncertainty? Terrorism fears taking their toll?



Source: MarketWatch.com; Read full article

5. After months of political uncertainty, Spain finally formed a government. Government bond yields declined on the news.



Source: BBC; Read full article



Back to Index




The United Kingdom


1. The Bank of England's Carney is going to stick around for a couple more years.

Source: FT.com; Read full article

2. UK mortgage approval numbers beat consensus, suggesting that credit is flowing.



Source: Reuters.com; Read full article

3. Another indicator of continuing robust credit growth in the UK is the acceleration in the broad money supply (discussed yesterday). Here is an updated chart.





Back to Index




Europe


1. Elsewhere in Europe, Denmark's unemployment rate is trending lower (beating expectations) but remains materially above the pre-recession lows.



2. Poland is almost out of deflation.





Back to Index




The United States


1. US PCE inflation indicators, which the Fed tracks closely, show stable price growth with no signs of acceleration. The "core PCE" (first chart below) and the "Trimmed Mean PCE" (second chart) are both around 1.7%.



Further Reading

2. US consumer spending remains robust.



3. Disposable income growth in the US continues to drift lower - now below 2.5% per year. Note that the spikes on the chart below are related to "tax planning" before the dividend tax rate went up.



4. The Chicago-area economic activity remains soft, with the Chicago PMI missing expectations by a significant margin.



5. Texas area manufacturing continues to shed jobs despite some recent improvements.



6. The Atlanta Fed GDPNow model came out of the gate with a 2.7% (annualized) forecast for the fourth-quarter GDP growth. The economists' consensus is at 2.3%.

Source: @AtlantaFed



Back to Index




Global Developments


The Citi G4 Inflation Surprise Index is trending higher (more upside inflation surprises). This trend is one of the reasons global bond investors have been jittery.

Source: Macquarie, @NickatFP, @joshdigga



Back to Index




Foreign Exchange


Here are a couple of helpful charts from Merrill Lynch.

1. F/X market liquidity has been worsening. A higher number indicates lower liquidity (trades move the market by a larger amount).

Source: BofAML, @NickatFP, @joshdigga

2. The dollar has become more sensitive to rates (more correlated to Treasury yields).

Source: BofAML, @NickatFP, @joshdigga



Back to Index




Commodities


1. With markets skeptical about an impactful OPEC deal, attention turns to US oil supplies in storage - which are expected to rise. Crude oil took a hit.



2. China's iron ore rally continues despite a massive rise in stockpiles. Futures seem to have become disconnected from reality.



Source: Bloomberg.com; Read full article

3. Metal prices continue to move higher as the Shanghai zinc futures go vertical.



Source: Bloomberg.com; Read full article

As discussed yesterday, even copper prices are on the move now.



Here is a summary of some of the most actively traded metals' performance year-to-date. The second chart below shows the London Metal Exchange index.

Source: @FTMarkets; Read full article



This metals rally feels a bit overdone - China's growth is stable but is by no means accelerating.

4. US hog prices continue to recover as "bacon deflation" comes to an end.





Back to Index




Equity Markets


1. US utilities rallied on Monday as Treasury yields moved lower. Investors still crave that dividend.



2. The US pharmaceuticals shares just can't catch a break as Valeant takes another tumble.



Source: Bloomberg.com; Read full article

The sector has underperformed the S&P500 by almost 30% year-to-date. An opportunity?





Back to Index




Food for Thought


1. Let's begin the Food for Thought section by looking at the share of income vs. taxation for top earners.

Source: @WSJecon; Read full article

2. The makeup of Canada's immigrants over time.

Source: @ECONdailycharts, @Tmp_Research; Read full article

3. The elections integrity index around the world.

Source: @DrewDeSilver, @FactTank, @Tmp_Research; Read full article

4. Texas Latino voters are expected to have a high turnout in this presidential election.

Source: @djfroschWSJ, @TimJHanrahan, @Tmp_Research; Read full article

5. The latest earthquake in Italy was the strongest in decades.

Source: @StatistaCharts, @Tmp_Research; Read full article

6. The "middle class" as a percent of households in select countries.

Source: @paul1kirby, @nytimes, @Tmp_Research; Read full article

7. The "five-finger discount" for several countries. Guess who is the winner.

Source: @paul1kirby, @business, @Tmp_Research; Read full article

Finally, we have a letter to the editor regarding yesterday's chart on the backlog of refugee application processing in Germany.

Dear Editor,

Chart 2 in today's Food for Thought combined with the comments "processing problem" and "gap continues to rise" is misleading. It suggests to the casual reader that more refugees continue to arrive than can be "processed," but that is not the case.

One needs to distinguish between the number of refugee arrivals, asylum applications, and asylum decisions. The number of arrivals has declined consistently this year and recently dropped below 10,000 per month (see links below - in German). The number of applications is close to 100,000 per month because authorities were so overwhelmed in 2015, that many refugees who arrived in 2015 and early-2016 had to wait many months before they could submit their asylum application. The fact that the number of asylum applications and decisions is rising, and that there are significantly more asylum decisions than new arrivals every month, are signs that the country is getting the "processing problem" under control.

Of course, that doesn't say anything about how successful the country will be in integrating the new arrivals.
Best regards,
Uwe

Further Reading 1
Further Reading 2



Back to Index
Thanks to Josh Marte (@joshdigga), @NickatFP, Matt Garrett (@MattGarrett3), Thomas Perrone (@Tmp_Research), Ycharts.com, Fitch Ratings, and S&P Global for helping with research for the Daily Shot.

We would also like to thank the Federal Reserve Bank of St. Louis for the incredible job they have done providing data and graphics to the public. Here is the credit and legal notice related to all FRED charts: FRED® Graphs ©Federal Reserve Bank of St. Louis. All rights reserved. All FRED® Graphs appear courtesy of Federal Reserve Bank of St. Louis. http://research.stlouisfed.org/fred2/
Contact the Daily Shot:

Content related comments, suggestions, questions, letters to the editor:
Editor@DailyShotLetter.com
Share
Tweet
Share
Read Later
Forward
All content provided by the Daily Shot is for informational and educational purposes only and is not meant to represent trade or investment recommendations. The Daily Shot is not produced by any entity that is registered as an investment adviser with any federal or state regulatory agency.
 
CONTENT COPYRIGHT© 2016 DAILY SHOT RESEARCH LLC. ALL RIGHTS RESERVED






This email was sent to jlounsbury59@hotmail.com
why did I get this?    unsubscribe from this list    update subscription preferences
Daily Shot Research · 123 Hawthorne Drdive · Milford, Pennsylvania 18337 · USA