Charday Penn/E Getty Images
For the week:
the s
Three-month Treasury yields ended the week at 4. 1825%. Two-year yields rose 14 bps to 4. 32% (an increase of 359 bps year-over-year). Five-year Treasury yields increased 23 fundamental issues to 3. 86% (-259 fundamental issues Ten-year Treasury yields increased 26 core issues to 3. 75% (-224 core issues). Long-term bond yields increased 28 core issues to 3. 83% (-192 core issues). Returns on the benchmark Fannie Mae MBS index increased 30 core issues to 5. 20% (313 foundation issues).
The Greek 10-year yield jumped 22 bps to 4. 51% (333 bps year-on-year). Italian profitability increased 21 core issues to 4. 50% (-333 basic issues). The Spanish 10-year yield increased by 22 core issues to 3. 47% (-291 base issues). Yields on the German Bund increased by 25 base issues to 2. 40% (-258 base issues). French rates rose through 26 base issues to 2. 93% (-273 base emissions). The 10-year bonds between French and German were expanded through about one to 53 fundamental issues. UK 10-year gold bond yields increased by 31 fundamental issues to 3. 64% (-267 fundamental issues).
Japan’s Nikkei stock index fell 4. 7% (down 8. 9% year-on-year). Japanese 10-year “JGB” yields rose thirteen basis points to 0. 385% (31 basis points year-on-year). The French CAC40 rose 0. 8% (-9. 1%). The German DAX equity index gained 0. 3% (-12. 2%). The Spanish equity index IBEX 35 recovered by 1. 9% (-5. 1%). Italy’s FTSE MIB index rose 0. 8% (-12. 7%). Emerging inventories were mixed. Brazil’s Bovespa index rebounded 6. 7% (down 4. 7%) and Mexico’s Stock Exchange index rebounded 1. 9% (down 5. 1%). South Korea’s Kospi index fell 2. 0% (down 22. 3%). India’s Sensex inventory index fell 2. 4% (to 2. 7%). The China Shanghai Stock Exchange index fell 3. 9% (down 16. 3%). The Turkish Borsa Istanbul National Hundred index rose 4. 6% (194%). The Russian equity index MICEX fell by 0. 4% (to 43. 9%).
The investment grade bond budget saw outflows of $6. 089 billion and the subprime bond budget recorded negative flows of $3. 5 trillion (from Lipper).
The Federal Reserve’s loans fell $16. 4 billion last week to TN$8. 531. The Fed’s loans are down $370 billion from their June 22 peak. Over the past 171 weeks, the Fed’s loans have risen to TN$4,820, or 129%. It soared $5. 72 trillion, or 203%, over the past 528 weeks. Elsewhere, the Fed’s holdings for foreign owners of the Treasury, firm debt last week to TN$3,309. “Assets on deposit” fell $116 billion, or 3. 4%, year-over-year. -year.
The total assets of the market fund fell from $28. 2 billion to $4. 713 billion. The total market budget increased to $47 billion, or 1. 0%, year-over-year.
Total paper fell through $24 billion to TN$1,278. CP has risen to $195 billion, or 18%, over the past year.
Freddie Mac’s 30-year loan rates increased 3 core issues to 6. 20% (an increase of 315 core issues year-over-year). 15-year yields fell by two core issues to 5. 50% (320 basic issues). Five-year hybrid ARM rates increased 3 foundation issues to 5. 39% (302 more foundation issues). Bankrate’s jumbo loan charges survey showed 30-year rates that dropped 4 foundation issues to 6. 57% (334 more foundation issues).
Currency Monitoring:
During the week, the U. S. index The U. S. fell 0. 4% to 104. 31 (a year-on-year increase of 9. 0%). During the week, the South African rand rose 3. 9%, the genuine Brazilian 2. 8% and the Japanese yen 2. 8%. , the Mexican peso by 2. 1%, the South Korean won by 2. 1%, the Canadian by 0. 7%, the Singapore by 0. 6%, the Australian by 0. 5 cents, the euro by 0. 3 cents and the Swiss franc by 0. 1 cents. cent. By contrast, New Zealand fell as much as 1. 5 percent, the Swedish krona by as much as 1. 1 percent and sterling by as much as 0. 8 percent. China’s onshore renminbi fell 0. 23% versus (down 9. 07% year-over-year).
Beware of raw materials:
Dec. 22: Bloomberg (Marvin G. Perez): “Cotton futures plunged after news broke that Chinese buyers of U. S. cotton made the biggest purchase write-off in a decade amid fresh signs of headwinds for the world’s largest exporter. China canceled 144,400 bundles of purchases for the week ending Dec. 15, the biggest weekly cancellation since June 2012. Chinese demand has slowed due to Covid-19 lockdowns and a contraction in manufacturing. The Asian country is the largest importer of fiber in the world and the largest customer of the US. U. S.
The Bloomberg commodity index has barely budged (-13. 5% year-on-year). Spot gold rose 0. 3% to $1,798 (down 1. 7%). Silver rose 2. 2% to $23. 73, up 1. 8%. WTI crude rose $5. 27 to $79. 56 (up 6%). Gasoline rose 11. 8% (up 7%), while herbal fuel fell 23. 0% to $5. 08 (up 36%). Copper recovered 1. 3% (down 15%). Wheat jumped 3. 0% (up 1%) and maize 2. 0% (up 12%). Bitcoin is up $200, or 1. 2%, this week at $16,800 (down 64%).
Monitoring market instability:
Dec 20 – Bloomberg (Masaki Kondo and Ruth Carson): “The Bank of Japan’s unforeseen aggressive turn sent shockwaves through global markets as the policy normalization of the world’s last bastion of the evolved world neared. ” lower interest rates Government bonds and Japanese Treasuries fell while the yen soared after the BOJ raised the cap on benchmark 10-year yields to around 0. 5% from 0 . 25%, unforeseen for all economists surveyed via Bloomberg. . . Japan is the world’s largest creditor, and tighter domestic currency situations may lead to a wave This threatens to drive down asset costs and drive up costs of global lending at a time when the economic outlook is deteriorating. It is vital not to underestimate the effect this could have, as tougher Bank of Japan policy would remove one of the recent global pegs that has helped keep borrowing costs low across the board,” wrote Jim Reid, global head of macro studies of Deutsche Bank AG…”
December 20 – Bloomberg (Toru Fujioka, Ruth Carson and Sumio Ito): “Bank of Japan Governor Haruhiko Kuroda has just given investors a glimpse of what they can expect when the world’s boldest experiment with ultra-accommodative financial policy ends. Under sustained market pressure, Kuroda surprised markets on Tuesday by saying he would now allow Japanese 10-year bond yields to reach around 0. 5%, double the previous upper bound of 0. 25%, the curve’s parameters until the end of his decade. “Long term in April or the beginning of the end of its unprecedented financial easing, but one thing is clear: a crack has opened for markets around the world to maintain prices in the coming weeks and months. “
December 20 – Financial Times (Nikou Asgari): “Global government bond markets fell on Tuesday after the Bank of Japan surprised markets by tightening its policy of setting long-term bond yields at incredibly low points. government debt, with Japan’s 10-year bond yield jumping 0. 2 percentage issues to 0. 47%, its highest point since 2015, before falling back to 0. 41%. 0. 1 percentage issues to 3. 6% and the yield on the German 10-year Bund rose a similar point to 2. 27%. “
December 22 – Financial Times (John Plfinisher): “The withdrawal of the primary central banks of developed countries from ultra-accommodative economic policy imposes a serious tension check on the global economic system. This is transparent due to the lack of liquidity in the markets. Signs of economic instability have reappeared since the acquisition of the British gilts market at the end of September, as a result of so-called liabilities-based investment strategies of pension funds. budget of the Truss government on September 23, 2009. “
December 23 – Bloomberg (Sagarika Jaisinghani): “Investors dumped stocks at record speed since major central banks signaled they would not be discouraged in their fight against inflation. . . The equity budget was hit by outflows of about $42 billion — the highest on record, in a week in which the Federal Reserve, European Central Bank and Bank of Japan were decidedly aggressive in their policy outlook for next year. Typical year-end trends contributed to the sell-off, strategists said.
Crypto bubble cave on the clock:
December 22 – Bloomberg (Ava Benny-Morrison, Allyson Versprille and David Voreacos): “FTX co-founder Sam Bankman-Fried landed in the United States. . . To face a series of fraud charges, like two of his former affiliates said they were cooperating with prosecutors. The revelation that Caroline Ellison and Gary Wang had pleaded guilty to fraud and were rushing with federal officials to investigate the collapse of the cryptocurrency exchange is a sign of concern for Bankman-Fried. York. “
Dec 19 – Reuters (Tom Wilson, Angus Berwick and Elizabeth Howcroft): “The world’s largest cryptocurrency exchange Binance is struggling to build confidence after a surge in consumer withdrawals and a sharp drop in price of its virtual token. The exchange said it had controlled net outflows of around $6 billion over 72 hours last week “non-stop” because its financials are strong and “we take our duty of custody seriously. ”After the Rival exchange FTX crashed last month, Binance founder Changpeng Zhao vowed that his company would “lead by example” in embracing transparency. . . However, a Reuters investigation of Binance business documents shows that The center of the business, exchange giant Binance. com, which has processed transactions costing more than $22 billion this year, remains commonly hidden from public view. Binance refuses to say where Binance. com is located. It does not disclose fundamental monetary data such as revenue, profit and coin reserves. orate has its own cryptocurrency, but does not disclose what role it plays in its balance sheet. It lends coins to consumers who oppose its crypto assets and allows them to trade on margin, with borrowed funds. But it does not detail the scope of these bets, nor its exposure. Binance takes that risk, or all of its reserves to fund withdrawals. “
Dec. 22 – Wall Street Journal (Jean Eaglesham): “The Securities and Exchange Commission is stepping up scrutiny of the jobs auditing firms do for cryptocurrency firms, fearing investors will feel reassured through corporate reporting. . . “We caution investors to be wary of some of the crypto companies’ claims,” said Paul Munter, the SEC’s interim lead accountant.
December 19 – Reuters (Noor Zainab Hussain and Carolyn Cohn): “Insurers are rejecting or restricting the policy for consumers exposed to the bankrupt FTX crypto exchange, leaving investors and virtual currency exchanges uninsured for any losses due to hacking, theft or lawsuits, various market players. Insurers were already reluctant to underwrite asset and director and officer policies (D
Dec. 20: Bloomberg (Steven Church and Emily Nicolle): “A unit of virtual asset company Genesis won a spot on an official committee of creditors in FTX’s bankruptcy, a panel that may play a leading role in the largest crypto-insolvency case brought before Genesis said in the past that it has $175 million in exposure to FTX, forcing its parent company Digital Currency Group to provide the company with a $140 million capital injection in November. budget to avoid filing for bankruptcy. “
December 21 – Reuters (Dietrich Knauth and Hannah Lang): “Core Scientific Inc, one of the largest publicly traded cryptocurrency mining corporations in the United States, has said. . . that filed for Chapter 11 bankruptcy, the latest in a series of battering the industry. . . Core Scientific attributed its bankruptcy to falling bitcoin prices, emerging energy prices for bitcoin mining, and an unpaid $7 million debt from U. S. crypto lender Celsius Network, one of its biggest clients.
Bright Bubble and Clock Mania:
December 21 – Bloomberg (Masaki Kondo and Garfield Reynolds): “R. I. P. negative. The global pile of sub-zero yield bonds on Wednesday as Japan’s two-year sovereign yield briefly moved into positive territory for the first time since 2015. Negative yield bond inventory — Yield debt stood at about $686 billion on Tuesday, down from a high of $18. 4 trillion two years ago — The accommodative financial authority is moving toward normalization. Danish opposite numbers in September.
December 20 – Reuters (Chiara Elisei): “The meteoric expansion of personal debt markets over the past decade will likely face reality, as an impending recession and higher interest rates reduce corporate profits and their ability to pay borrowing costs. An era of ultra-easy central bank liquidity has attracted investors to personal credit, lured through juicy returns ranging from 1 to 2 digits. This paved the way for mutual funds, such as Blackstone, to fill the void and lend cash to companies, which are personal equity firms. The economic crisis is poised to escalate as investors’ appetite for risky assets is tested through recession and competitive economic tightening. In 2010, according to. . . Preqin. . . “
December 21 – Bloomberg (Michelle F. Davis, Crystal Tse and Jan-Henrik Förster): “Stubbornly higher inflation, sky-high borrowing prices and geopolitical uncertainty have hampered deals in 2022, causing global M&A activity to fall nearly a third from last year. Corporations reported $3. 5 trillion in deals in 2022. . . Mega deals announced earlier in the year were temporarily replaced due to considerations about the option to cross the final M&A line, with deal activity per month falling by nearly a portion from May to June. “It’s the story of two years,” said Melissa Sawyer, Group M’s global head.
December 19 – Financial Times (Tabby Kinder): “Tech startups that have historically relied on wealthy Silicon Valley investors to fund ambitious expansion plans are forced to choose investment deals to aid in their activities and avoid drastic valuation discounts. A Sharp drop in venture capital deals, coupled with a closed market for initial public offerings, led to an investment crisis for many personal generation corporations during the year. the first 11 months of this year to $ 286 billion. . . , according to. . . Silicon Valley Cooley lawyers said the total price of late-stage venture capital deals he pleaded for had fallen nearly 80% this year. Meanwhile, initial public offerings fell to their lowest point since 2009, cutting off a key fundraising source for mature personal e-businesses and their backers. avi Viswanathan, founder of. . . New View Capital. ” There will come a time when even corporations with 18 to 24 months of capital will have to raise. There’s going to be a lot of pain. ‘”
December 22 – MarketWatch (Joy Wiltermuth): “The $21 trillion advertising real estate market is facing a flood of maturing debt, at much higher rates. An era of reasonable debt that has helped drive up costs for U. S. hotels, buildings and other advertising houses. U. S. Funding borrowers saw loan rates double in 2022 from lows of 3%. . . Rising financing costs were already a fear by 2023, with billions of dollars in old ad loans coming due. ), have pulled out of ostentatious rents in recent weeks. “
December 21 – Reuters (Akash Sriram and Jane Lanhee Lee): “Chipmaker Micron Technology Inc. . . expects a much larger-than-expected loss in the current quarter and said it would lay off 10% of its workforce next year, leading to a persistent glut of “Due to the significant discrepancy between source and call to enter the 2023 calendar, we expect profitability to remain proven in 2023,” said Micron CEO Sanjay Mehrotra. Micron had approximately 48,000 international workers as of September 1. “
December 19 – Bloomberg (Jan-Henrik Förster, Priscila Azevedo Rocha and Abhinav Ramnarayan): “Private equity will want to pull the e-book out of checks in the coming months if the industry wants to return to its record speed of transactions. That’s because banks stuck with billions of dollars in corporate loans dicy, a hangover from underwritten transactions in an environment of lower interest rates, which is expected to help significant new deals well into 2023. for leveraged buybacks,” said Christian Sinding, CEO of EQT AB. . . These lenders “haven’t been there to underwrite, not in a significant size, and they’re not yet,” he later added. That leaves acquisition giants like EQT, CVC Capital Partners and KKR.
Dec 18 – Reuters (Rae Wee): “Private equity holdings are selling at record speed in a opaque secondary market, investors say, as asset managers pour money to cover losses elsewhere and rebalance stocks. ” The selloff is the latest of several signs of stress in the personal markets and is another sign that investors are beginning to lose interest in the “alternative assets” that only recently attracted money. . . As popularArray has reported, they have been Expanded to surround real estate and infrastructure projects, such budgets are difficult to manage exit before adulthood – regularly at least 3 years – fund managers who want to withdraw money use a secondary market that has been running for the past few months The proposed haircuts suggest that there is a compelling desire to go out. . . Hamilton Lane claims a record figure is 224,000 million dollars in private capital pa Investments were presented in the secondary market this year until mid-November. Not all of them were sold, but analytics firm Pre qin estimates that the price of secondary transactions during the third quarter was around $65 billion. That’s not far off from the 2021 total of just over $70 billion and that’s particularly more than in years past. “
December 22 – Reuters (Lananh Nguyen, Saeed Azhar and Lawrence White): “Bankers in New York and London are bracing for year-end bonuses that recruiters estimate will be 30% to 50% lower, while some may get nothing at all as deals spit out and economic pessimism sets in. awards since 2006 as the economy recovered from the pandemic. But this year, the speed of mergers and acquisitions and fair deals has slowed, especially as debt funding markets have collapsed and stock market volatility has hurt valuations.
December 21 – Financial Times (Harriet Agnew): “Cathie Wood’s Ark Investment Management has lost nearly $50 billion in assets from its robust publicly traded budget since peaking in 2021, underscoring the magnitude of this year’s losses in speculative stocks. Ark’s nine ETFs fell to $11. 4 billion from a high of $60. 3 billion in February last year. . . “The effects of Ark Innovation have been appalling this year and very disappointing for investors,” said Robby Greengold, a strategist at Morningstar, which downgraded the ETF in April. from ‘neutral’ to ‘negative’. “
December 19 – Wall Street Journal (Veronica Dagher): “Many Americans dream that the road to wealth creation is like a vacation around the Monopoly board, buying rent-generating homes as a source of income. This is possibly true, but financial advisors save it the costs and hassles of gambling increase the owner’s game. People who are thinking about homeownership will find it harder to make a profit after a year marked by emerging housing costs and borrowing rates. Rents are also emerging, but due to inflation, so are maintenance costs and ongoing expenses maintenance of the house. The benefits of owning rental assets (passive source of income and tax breaks) have been promoted on YouTube and TikTok in recent years. However, anyone considering purchasing a rental assets at this time deserves to consider the likelihood of higher costs and unforeseen expenses. “
Dec. 19 – Bloomberg (Sagarika Jaisinghani): “U. S. inventoriesThe U. S. is on the verge of its worst year since the global currency crisis and, according to Morgan Stanley strategist Michael Wilson, corporate profits are about to suffer the same fate. An imminent gain from the recession “in itself may be similar to what happened in 2008/2009,” Wilson said. the market evaluates these kinds of end results until it happens,” Wilson said.
Eve of the Ukrainian War:
December 22 – Wall Street Journal (Ken Thomas and Andrew Restuccia): “Ukrainian President Volodymyr Zelensky said his country would never oppose Russia in its fight and suggested Washington increase military aid in an impassioned speech to Congress that positioned itself as the war enters its eleventh month. Speaking to a packed room, a provocative Mr. Zelensky touted Ukraine’s successes on the battlefield and said the West was united in its opposition to Russia’s invasion. He ended a lightning stopover in Washington that included an assembly in the Oval Office. with President Biden and a joint press conference at the White House. “Against all dark and catastrophic scenarios, Ukraine did not fall. Ukraine is alive and vibrant,” he said.
December 19 – Reuters (Tom Balmforth and Valentyn Ogirenko): “Russian ‘suicide bomber’ drones struck key energy infrastructure in and around Kyiv on Monday and President Vladimir Putin visited Belarus for the first time since 2019, fueling Ukraine’s fears that it is pressuring its best friend to open a new invasion front. But Ukraine discussed lightly through Putin and his Belarusian counterpart Alexander Lukashenko after their talks, with comments to reporters focusing instead on economic and bilateral cooperation.
December 19 – Reuters (John O’Donnell): “European Union unity over sanctions against Russia has begun to falter as nervousness over the effect on Europe’s faltering economy weakens to punish Moscow for the war in Ukraine. EU leaders agreed on a ninth package of sanctions on Thursday, but talks were acrimonious, with Poland and Russia’s neighboring Baltic states campaigning for tougher measures, while states further west, such as Germany, were more hesitant.
United States/Russia/China/Europe See:
December 19 – Wall Street Journal (Ann M. Simmons): “Russia has said it will conduct joint naval training with China, underscoring the close relationship between the two nations as the Kremlin seeks to bolster the component to offset Western isolation over its war in Ukraine. . The Russian Ministry of Defense has declared. . . that a detachment of warships from the Vladivostok Pacific Fleet has been put to sea to participate in naval training with their Chinese counterparts, starting Wednesday. . . The active component of the trainings would come with ‘joint firing of rockets and artillery at air targets, artillery firing at maritime targets, as well as the practice of joint anti-submarine movements with the practical use of weapons,'” the Defense Ministry said.
December 21 – Reuters: “Former Russian President Dmitry Medvedev embarked on a wonderful vacation in Beijing and held talks with Chinese President Xi Jinping, in which he said he discussed the confrontation in Ukraine. Medvedev, now deputy chairman of Russia’s Security Council, has released a video . . . Showing him the Xi assembly, smiling at the images and an assembly between Chinese and Russian officials. Medvedev said he and Xi discussed the “unlimited” strategic partnership of the two countries, as well as Ukraine.
December 22 – Reuters (Mark Trevelyan): “Russia blamed Japan. . . to abandon decades of pacifist politics and adopt ‘rampant militarization,’ in reaction to a $320 billion defense plan announced through Prime Minister Fumio Kishida last week. “It is transparent that Tokyo has embarked on the path of an unprecedented accumulation of its own military might, adding the acquisition of attack potential,” the Russian Foreign Ministry said.
Deglobalization and the eve of the Iron Curtain:
December 22 – Bloomberg (Michelle Jamrisko and Ruth Carson): “The king of the dollar faces a revolt. Tired of an overly strong and newly armed dollar, some of the world’s largest economies are exploring tactics to circumvent the U. S. currency. Smaller nations, adding at least a dozen in Asia, are also experimenting with de-dollarization. And corporations around the world are promoting an unprecedented percentage of their debt in local currencies, fearing a new dollar strength. to be dethroned. . . Calls for a “dollar peak” have proved premature. But not so long ago, it was almost unthinkable for countries to explore payment mechanisms that bypassed the US currency or the SWIFT network that underpins the global monetary system.
Inflation tracking:
December 18 – Financial Times (Valentina Romei): “Underlying value pressures continue to rise in the most evolved primary economies despite recent declines in headline inflation, indicating that central banks will want to continue tightening policy in the coming months. Core inflation, which excludes adjustments in food and energy prices, and rate-makers see this as a major measure of constant pressures on value: it is accelerating in many parts of the world. . . Base rates were still emerging in November in most of the 33 countries monitored by the FT and remain well above the 2% inflation point that top central bankers are aiming for. “
Dec. 23 – Associated Press (Paul Wiseman): “A measure of inflation closely watched by the Federal Reserve slowed last month. . . On Friday. . . It showed values rose 5. 5% in November from a year earlier, with a revised 6. 1% accumulating in October and the smallest accumulation since October 2021. Excluding volatility in the value of food and energy, so-called core inflation rose 4. 7% from last year. This is also the smallest accumulation since October 2021. Monthly, stocks rose 0. 1% from October to November, following a 0. 4% increase last month. Underlying stocks rose 0. 2%.
Oversight of Biden’s management:
December 21 – Reuters (Steve Holland and Pavel Polityuk): “Presidents Volodymyr Zelenskiy and Joe Biden showed solidarity at the White House. . . on the Ukrainian leader’s first foreign vacation of the war, when the United States announced new military aid, adding Patriot missiles. Zelenskiy plans to seek more help during the holidays. The Ukrainian president, dressed in trousers and an olive green sweater, Biden and the first girl, Jill, posed on the White House lawn before the two leaders spoke in the Oval Office to reporters.
December 22 – Associated Press (Zeke Miller, Lisa Mascaro and E. Eduardo Castillo): “Volodymyr Zelenskyy of Ukraine told enthusiastic U. S. lawmakers a provocative wartime stopover in the nation’s capital. . . That against all odds, his country still stands, thanking Americans for helping fund the war effort with money that is “not charity,” but an “investment” in global security and democracy. in February, he aimed to revitalize aid for his country in the United States and around the world. Zelenskyy called the tens of billions of dollars in the U. S. military and the economic aid provided over the past year important for Ukraine’s efforts to push back Russia and called for even more in the future. Charity,” he tried to reassure both those in the room and those watching from home. “This is an investment in global security and democracy that we are managing in the ultimate form of culpability. “
Federal Reserve Oversight:
December 21 – Reuters (Michael S. Derthrough): “Seven Republican U. S. senatorsUU. . . announced a new bill to remodel the Federal Reserve’s 12 regional banks, amid fears that the establishments have too much politics. In a press release through outgoing Sen. Pat Too, lawmakers said they were asking that regional presidents of federal banks be appointed through the president and presented through the Senate, matching needs to a member of the central bank’s board of governors. Among its provisions, the bill would also reduce the 12 regional Feds “This will allow for more effective congressional oversight and ensure that all Fed regional bank chairmen have permanent seats on the Federal Open Market Committee,” the press release said.
December 21 – Reuters (Michael S. Derby): “The Federal Reserve’s continued efforts to reduce its balance sheet may also end faster than previously thought. . . Fed watchers will likely have to somehow halt its current phase-out of Treasuries and securities-backed mortgages (MBS) next year because of the liquidity shortage in the money sector that is likely already occurring. Comments from officials on the balance sheet outlook: “It turns out they’re eerily silent about all of this right now,” said Derek Tang, an economist at forecasting company LH Meyer.
American bubble clock:
Dec. 21 – CNBC (Diana Olick): “Sales of existing homes fell 7. 7% in November compared to October, according to the National Association of Realtors. The seasonally adjusted annualized rate 4. 09 million units. . . Sales fell 35. 4% year-on-year-year, marking the tenth consecutive month of decline, the weakest speed since November 2010, with the exception of May 2020. . . At the end of November, there were 1. 14 million homes for sale, a cumulative of 2. 7% compared to November last year, however, at the current pace of sales, this represents a still low source of 3. 3 months. . . Sales fell in all regions but fell most sharply in the West, where costs are higher, down nearly 46 percent from a year ago. November, an average of 24 days, compared to 21 days in October and 18 days in November 2021. Despite the market slowdown, 61% of homes were under contract in less than a month.
Dec. 23: Bloomberg (Reade Pickert): “U. S. New Home SalesU. S. rates of higher growth in November, suggesting some stabilization in demand as lending rates declined at the end of the month. . . Purchases of new single-family homes rose 5. 8% to 640,000 annualized rates. pace last month after expanding in October. . . Last month’s sales growth was concentrated in the West and Midwest. The report. . . It showed the median sale value of a new home rose 9. 5% from last year to $471,200. There were 461,000 new homes for sale at the end of last month, though the vast majority are still under construction or have not yet begun. “
Dec. 19 – CNBC (Diana Olick): “Homebuilders were less confident about their business in December, but are ready to see potential green shoots. Builder sentiment in the single-family home market fell 2 problems to 31 in December on the National Association of Home Builders/Wells Fargo Housing Market Index. Any value below 50 is negative. This is the twelfth consecutive month of decline and the lowest reading since mid-2012, with the exception of a very brief decline at the start of the Covid pandemic. “
December 20 – Bloomberg (Reade Pickert): “The structure of new housing in the U. S. The U. S. economy continued to decline in November and rental homes fell as higher borrowing prices, coupled with widespread inflation, eroded affordability and demand for housing. Home starts fell 0. 5% last month at an annualized rate of 1. 43 million. . . The single-family housing structure fell at an annualized rate of 828,000, the lowest since May 2020. Construction requests. . . decreased 11. 2% to 1. 34 million annualized sets Permits for single-family homes fell 7. 1% at the slowest rate since 2020. . . The number of completed homes rose nearly 11% to 1. 49 million annualized since August 2007 and a sign that developers are making further progress on backlogs amid a decline in demand.
December 21 – Reuters (Lucia Mutikani): “The existing US account deficit is a major problem. UU. se drastically reduced in the third quarter when exports hit a record high. . . 9. 1% to $217. 1 billion last quarter, the smallest hole since the current quarter of 2021. The existing account accounted for 3. 4% of gross domestic product, down from 3. 8% in the current two-year quarter. “
December 19 – Axios (Emily Peck): “374 employee movements were introduced in 2022, 39% accumulating during 2021, according to a Cornell-controlled database. Why it matters: Driven in part by anger over ongoing situations, the pandemic and driven by other union victories, all types of staff — warehouse staff, teachers, nurses, graduate students, journalists — have walked off the job. Many others voted to unionize, adding more than 260 Starbucks retail outlets last year, it’s not easy to pay more and By the end of the week, the University of California reached a tentative agreement with about 36,000 employees that would end the biggest strike of the year and offer pay raises of up to 55 percent.
Dec. 21 – CNBC (Diana Olick): “Mortgage interest rates fell last week, and while that didn’t help boost demand from homebuyers, it sent homeowners to save on their monthly payments. . . Homebuyer loan programs were down 0. 1% for the week and were 36% lower than the same week a year ago. “
December 21 – Wall Street Journal (Jesse Newman and Jacob Bunge): “High crop and livestock costs are driving a boom in the U. S. farm belt. “It is expected to rise to $160. 5 billion this year, driven by higher agricultural product costs. If realized, the source of farm income would succeed at the highest point since 1973 in inflation-adjusted dollars, marking a strong recovery from an agricultural recession that hit farmers and their suppliers over the past decade.
Dec. 20 – Reuters (Dec. 22 – Financial Times (John Plender): “U. S. corporations borrowed 9% more to finance their investments in appliances in November than a year earlier, said the Equipment Leasing and Finance Association (ELFA) of the industry framework. . . Businesses signed up for $8. 6 billion in new loans, rents and lines of credit last month. . . Loans are up nearly 6% since January. ” The increase in interest rates appears to have little to no effect on origination volume in November. “said ELFA CEO Ralph Petta.
Fixed Income Supervision:
Dec. 22 – Bloomberg (Carmen Arroyo): “Debt markets are classifying U. S. leveraged loans as a matter of debt. The U. S. economy economy has two categories: smart cash and distressed loans. An increasing proportion of the costs in the market are either too high or too low. About 5% of the market is trading at less than 80 cents on the dollar, a consistent percentage that has more than doubled since June, according to JPMorgan. . . With more and more borrowing costs reaching extremes, businesses facing difficulties can see their loans plummet rapidly. “This puts the worst businesses at risk as they will find it harder to refinance,” said Roberta Goss, senior managing director and head of bank lending and secured loans. Bonus platform at Pretium Partners LLC. . . “
December 20 – Reuters (Shankar Ramakrishnan and David French): “Private U. S. oil and fuel corporationsU. S. governments are increasingly turning to niche financing design that ensures their production, providing an avenue of financing for homemakers and homeowners as classic resources become more expensive or simply run out. Known as PDP’s asset-backed securitizations (ABS), these profits take the revenues generated by corporations’ proven, developing, and generating oil and fuel (PDP) operations and use that money as collateral for a bond that is sold to investors. Under pressure from stakeholders to limit lending to the oil and fuel sector due to its environmental impact, workforce manufacturers, more dependent on bank lines than their indexed counterparts, may have access to external financing through this niche product. “
Chinese watch:
December 18 – Bloomberg: “Massive buybacks through Chinese retail investors are driving the country’s money managers to reduce their bond holdings like never before. Some analysts say the debt settlement is over. Yuan ($186 billion) of bonds in the interbank market last month, the highest on record, according to. . . Knowledge dating back to 2017. de individual investors in the country’s debt market To soften the blow of buybacks, regulators reportedly asked some commercial and insurance companies that own banks to buy bonds.
December 18 – Reuters (Liangping Gao, Ryan Woo and Joe Cash): “Business confidence in China has fallen to its lowest level since January 2013, according to a World Economy survey. . . , reflecting the effect of the increase in COVID-19 cases of economic activity with the abrupt lifting of many pandemic measures. The index fell to 48. 1 in December from 51. 8 in November, according to World Economics’ survey of sales managers of more than 2300 corporations conducted Dec. 1-16. The index was the lowest since the survey began in 2013. “
Dec. 21 – Bloomberg: “The Chinese government has stepped up calls to prioritize expansion next year and help the real estate sector out of its worst crisis on record, another sign that the economy will be the focus in 2023. The State Council, the central bank and the main securities regulator met in recent days to examine last week’s economic policy meeting. . . The minutes of those meetings detailed a commitment to policies designed to save the economy and put it on the path to stability. He announced stimulus measures, arguing that existing policy measures can be more effective. . . “
December 16 – Bloomberg: “China pledged to encourage entry and personal corporations, as Beijing revives expansion after abandoning its Covid Zero policy. Meeting to set economic policy priorities for 2023. . . They also pledged to inspire the expansion of the personal sector and Platform corporations must play a leading role in development. They must start by improving social expectations and building confidence in development. ‘”
December 20 – Reuters (Kevin Yao): “The World Bank has downgraded its expansion outlook in China for this year and next, bringing out the effect of the abrupt relaxation of strict COVID-19 containment measures and continued weakness in the real estate sector. The. . . moneylender. . . said he expected China’s economy to grow 2. 7% in 2022, before recovering to 4. 3% in 2023 when it reopened after the worst of the pandemic. The bank’s planned expansion for 2022 would be well below the official target of around 5. 5%.
December 23 – Financial Times (Qianer Liu, Cheng Leng, Sun Yu and Ryan McMorrow): “The Chinese government estimates that around 250 million people, or 18% of the population, were infected with covid-19 in the first 20 days of December. . . The estimates, which come with another 37 million people inflamed on Tuesday alone, or 2. 6% of the population, were revealed by Sun Yang, deputy director of China’s Center for Disease Control and Prevention. Sun said the rate of Covid spread in the country continues to grow and estimates that more than a part of Beijing and Sichuan’s population is already inflamed, other people briefed on the assembly said.
December 19 – New York Times (Chris Buckley, Alexandra Stevenson and Keith Bradsher): “After micromanaging the coronavirus strategy for almost 3 years, the country’s leader, Xi Jinping, suddenly let others improvise. The southwestern city of Chongqing was the last front line of Xi Jinping’s ‘zero covid’ war, until he came to personify China’s potentially devastating turnaround that cracked the Communist Party’s edifice of absolute control. Chen Min’er, the Chongqing party secretary, has devoutly complied, closing neighborhoods and ordering the immediate construction of a quarantine hospital designed to accommodate up to 21,000 more people. “Resolve to fight and win this war of annihilation,” opposed to the pandemic, Chen said. Introduce a protégé of Mr. Xi to officials on November 27. But 10 days later, China suddenly abandoned the “zero covid” strategy on which Xi had staked his reputation. Now the country is facing a surge of infections, and Xi has left officials struggling to manage disorder and uncertainty. “
December 22 – Bloomberg: “China is most likely experiencing 1 million covid infections and 5,000 virus deaths each day as it grapples with what is expected to be the largest outbreak the world has ever seen, according to a new analysis. The scenario may only get even worse for the country of 1. 4 billion people. This existing wave may cause the daily case rate to rise to 3. 7 million in January, according to Airfinity Ltd. , a London-based research company that focuses on predictive fitness analytics and has been tracking the pandemic since it began, most likely then there will be another wave of infections bringing the daily peak to 4. 2 million in March. the organization said.
December 20: Reuters (Bernard Orr and Xinghui Kok): “China’s cities rushed to install hospital beds and build fever clinics on Tuesday as the government reported five more deaths and foreign fear grew over Beijing’s wonderful resolve to allow the virus to circulate freely. . . ” Each new epidemic wave in the country carries the threat of new variants, and this threat is all the greater the larger the epidemic, and the existing wave in China promises to be significant,” said Alex Cook, associate dean of studies at the Saw Swee Hock National School of Public Health at the University of Singapore.
December 21 – Reuters (Casey Hall, Martin Quin Pollard and Joe Cash): “As the great wave of COVID-19 infections in China begins its march through a country roughly the length of Europe, the ripple effect on businesses is accelerating. From its original epicenter in the north, adding the capital Beijing, COVID-19 infections are spreading across the country and cases are hampering hard work in production belts. Retail and financial companies have been hit hard by staff shortages, and brands are not far behind. , according to a foreign industry organization operating in China. “The retail and visitor sectors are in big trouble. Obviously, they have limited staff that must be had to paint due to illness, so many of our flagship stores don’t even open their doors,” said Noah Fraser, executive director of the Canada China Business Council.
Dec. 23 – Bloomberg: “China’s rising covid infections are keeping other people at home and causing travel and economic activity to plummet, according to the most recent high-frequency data. Several mobility measures, adding traffic congestion in major cities, subway use and the number of domestic flights has decreased In recent days, the number of metro passengers has decreased in cities such as Shanghai, Guangzhou, Shenzhen, Xi’an and Nanjing as infections increase, while in Beijing. . . Metro usage has stabilized and increased slightly over the past 4 days, still about 80% below the same period in 2019. Congestion levels in 15 major cities are 56% below January 2021 levels. . . “
December 18 – Financial Times (Eleanor Olcott, Qianer Liu, Gloria Li and Cheng Leng and Joe Leahy): “The coronavirus sweeping China causes widespread disruption of the industry, as staff shortages threaten to close factory production lines and truckers get sick, the Omicron variant of the virus has begun to affect several major cities since the previous zero-covid containment policy of the President Xi Jinping reversed himself earlier this month. Beijing, where more than a portion of the population of 22 million is infected, according to some estimates. It started operating from home, however, some factories are scarce because the staff is sick. Business owners and executives said it was increasingly disrupting production and supply chains.
December 21 – Bloomberg (Jinshan Hong): “Traffic in China’s largest cities has fallen to the lowest level since the Lunar New Year holiday earlier this year. . . A measure of congestion levels in 15 major cities is 45% lower than in January 2021. . . The only other time that declined this year was early February, when the Lunar New Year era saw factories close, restaurants close and others leave major metropolises for home.
December 19 – Financial Times (William Langley and Ryan McMorrow): “China’s state media has promised to return to ‘normal’ within a few months and has rejected Western complaints as its censors seek to paint a ‘wave of exits’ of coronavirus cases sweeping the country as a component of a pre-planned strategy. “Virus experts expect normalcy until spring,” reads a China Daily headline, along with other articles with headlines such as “Experts: Omicron Less Likely to Cause Serious Illness. ” »
December 22 – Reuters (Zoey Zhang and Bernard Orr): “A Shanghai hospital has told its staff to prepare for a ‘tragic battle’ against COVID-19 as it expects some of the city’s 25 million citizens to become inflamed by the end of next week, as the virus spreads through China largely unchecked. . . China reported no new COVID deaths for a moment directly on Wednesday, even as funeral home staff say demand for its has risen sharply over the past week.
December 21 – Bloomberg: “Months after Shanghai went through a brutal lockdown to prevent the spread of Covid, the virus is starting to make its way virtually unchecked among the megacity’s 25 million residents. Hospitals are struggling to cope with the number of inflamed patients, pharmacies are turning away empty-handed consumers, businesses are definitive because they are sick, most schools have closed and public transport use is plummeting. “
December 19 – Bloomberg: “Police and security guards were stationed outside a crematorium in Beijing that has reportedly been designated to deal with Covid deaths, as questions mount about China’s virus death toll. Guards led reporters to the back of the Beijing Dongjiao funeral home parking lot on Monday, as a line of about a dozen black minivans entered the site on Beijing’s eastern outskirts, which is used to prepare and process bodies for cremation.
December 19 – Financial Times (Sun Yu): “China’s blood banks are battling supply shortages as a wave of Covid-19 cases scares away donors, putting an already overburdened medical system. At least seven provincial and municipal governments have reported a drop in blood donations in recent weeks that has reduced their stock to just 16% of last year’s levels. The outbreak has led to many potential blood donors becoming ineligible after testing positive for covid or being reluctant to venture outdoors for fear of infection. “
December 21 – Financial Times (Sun Yu): “A giant measure of China’s budget deficit hit a record high in the first 11 months of this year as a house collapsed and President Xi Jinping’s zero-covid policy weighed on the world’s second-largest giant. “Total budget spending at all levels of government exceeded profits by 7. 8 billion yuan ($1. 1 billion) from January to November. This figure was more than double the 3. 7 billion yuan reported at the same time last year. economic damage caused by Xi Jinping’s Covid-19 elimination policy. . . as well as the repression of the theory of genuine property through its government. “
December 21 – Bloomberg (John Cheng and Alice Huang): “Despite a disastrous year for China’s real estate sector, markets have gone from excessive pessimism to euphoria in just a few weeks thanks to Beijing’s policy bazooka. Now there are more and more symptoms that the rally is drying up Real estate stocks have entered a technical correction after emerging 88% in the six weeks to early December. program for personal developers and the lifting of the ban on fair refinancing. “
Central bank supervision:
December 22 – Bloomberg (Andrew Langley): “European Central Bank Vice President Luis de Guindos said interest rate hikes, such as the half-point move noted at this month’s assembly, may be the norm as politicians continue their fight against rising inflation. Despite forecasts of a winter recession in the 19-country euro zone, the tightening of financial policy will have to continue, Guindos told the French newspaper Le Monde. . . Guindos said. Rates at this rate for some time. ‘”
Global bubble monitoring:
Dec. 23: Bloomberg (Alice Kantor): “Global space costs have cooled as emerging borrowing costs keep many buyers on the sidelines. Prices fell 7. 5% in the third quarter from a year earlier. Hong Kong, Peru, China and New Zealand also saw declines. Overall, housing costs in 56 countries and territories rose at a rate of 8. 8% in the third quarter, down from 10. 9% at their peak in the first 3 months of the year, according to the . . . Knight Frank.
Dec. 20 – Bloomberg (Samson Ellis): “Taiwan’s export orders have fallen to the highest since the height of the global currency crisis more than a decade ago, signaling a deterioration in global demand for generation products. Overseas orders to Taiwanese corporations fell 23. 4 percent in November from a year earlier, according to an economy ministry on Tuesday. This was at most double the 12. 8% drop economists had forecast in a Bloomberg survey and was the biggest drop since March 2009.
European watch:
December 23 – Wall Street Journal (Chelsey Dulaney): “Investors are preparing for European governments, led by Germany, to flood the market with new debt next year as they spend heavily on their economies due to high energy costs. European governments are expected to increase bond issuance by 10% to €1. 2 trillion in 2023, or about $1. 27 trillion, according to the country. Danske Bank. . . Germany surprised investors last week by announcing it would sell about 300 billion euros in bonds in 2023, a record and more than 70 billion euros this year.
December 18 – Bloomberg (Alice Gledhill and Libby Cherry): “European bondholders are content that this year’s devastating losses can continue into 2023. The worst year on record for the region’s bonds ends with one of the steepest sell-offs in months. . . While investors are already accumulating another 130 basis points, compared to only a portion of the Federal Reserve’s point buildup, a new wave of promotion is coming. This comes as a surprise to investors who had waded into the region’s battered assets with a false sense of security in the face of timid inflation symptoms.
December 18 – Financial Times (Jasmine Cameron-Chileshe): “Britain is preparing for one of the most disruptive strike weeks in recent history after the government signalled its determination to confront unions despite calls for wage negotiations by fitness leaders and some Conservative MPs. Nurses, paramedics, customs and immigration staff, postal and rail personnel will leave in the coming days. Prime Minister Rishi Sunak is facing a growing challenge due to strikes.
December 21 – Reuters (David Milliken): “UK government bonds rose last month to their highest point ever recorded in November, reflecting the emerging burden of energy subsidies, interest on debt and the cancellation of a payroll tax, according to official figures shown by Array. Loans rose to 22 billion pounds ($26. 7 billion) from 8. 1 billion pounds a year earlier, before Britain was hit by high charges for herbal fuel that forced the government to subsidize the heating and electricity costs of millions of families and businesses. A much smaller building up to £13 billion. “
EM Crisis Monitoring:
December 19 – Reuters (Alexander Villegas and Marco Aquino): “In the South American nation, voter anger has long boiled close to the surface years of tumultuous politics that has seen six presidents in five years. Most of the former leaders have been jailed or The stage has erupted in the past two weeks. Miss. At least 18 other people were killed. Many protesters, some Castillo supporters and others simply angry, said they felt ignored by political leaders. Castillo, a former instructor and son of peasants, had been at least one of them, they said, despite his many flaws.
December 22 – Reuters (Nevzat Devranoglu): “Turkey’s monthly minimum wage will be 8,506. 80 lira ($455) in 2023, the presidency said. . . – an increase of 55% from the point where we decided in July and a hundred percent is accumulating since January. . . President Tayyip Erdogan said the minimum wage could be raised last year if necessary. Annual inflation has risen above 85% in recent months, but has begun to slow slightly.
Japan Watch:
December 20: Bloomberg (Toru Fujioka and Masaki Kondo): “Bank of Japan Governor Haruhiko Kuroda is facing increasing complaints about his surprise monetary policy move, with several prominent economists calling it a blow to the BOJ’s credibility and investors rushing toward the new central bank. . red line on bond yields BOJ Observers, Adding Mitsubishi UFJ Research’s Shinichiro Kobayashi
December 23 – Reuters (Leika Kihara): “Japan’s core customer inflation hit a new four-decade high as companies continued to pass on EM prices to households. . . A sign that value increases were widening and could keep the central bank under pressure. to decrease the great stimuli. . . Japan’s Core Customer Value Index (CPI). . . It rose as much as 3. 7% in November compared with last year. . . , in line with market forecasts and recovering from a 3. 6% gain in October 1981, when inflation was still high due to the effect of the 1979 oil surprise and a booming economy. “
December 22 – Bloomberg (Yoshiaki Nohara, Isabel Reynolds and Erica Yokoyama): “Japan will once return to bond issuance to finance another year of record spending, and this week’s wonderful Bank of Japan policy resolution is expected to put pressure on borrowing costs. The government will seek to factor bonds worth more than 35. 6 trillion yen ($270 billion) to finance an initial budget of more than 114. 4 trillion yen for the year beginning in April. “
December 20 – Reuters (Kaori Kaneko): “Japan will pay close attention to the COVID-19 situation in China, as well as dangers such as a global economic slowdown, price increases and source constraints, according to its December monthly report. The report of the Cabinet Office of Economy comes as Japan. . . It is grappling with slow global expansion and high import prices that have affected its exports and production activity. “If the infection scenario in China has an effect on origin chains or trade, it may also have an impact on the Japanese economy as we have noticed” earlier this year,” a Cabinet Office official said.
Monitoring social, political, environmental and cybersecurity instability:
Dec 22 – Wall Street Journal (Julie Wernau and Jon Kamp): “Life expectancy in the United States fell last year to the lowest point since 1996. . . , after Covid-19 and opioid overdoses will increase the number of deaths. Covid -19 the third leading cause of death for a moment consecutive year in 2021. . . Overdose deaths have increased fivefold in the last two decades The death rate of the US population. years in 2020 Before the pandemic, life expectancy at birth in the United States was 78. 8 years in 2019. The decline in 2020 is the largest since World War II.
December 21 – Reuters (Mohammad Yunus Yawar and Charlotte Greenfield): “University scholars in Afghanistan were rejected on Wednesday after the Taliban-led leadership said women would be suspended from higher education. The resolution to ban women was announced late Tuesday in a letter to universities from the Ministry of Higher Education, drawing condemnation from foreign governments and the United Nations.
Speculative leveraged monitoring:
December 20 – Financial Times (Ortenca Aliaj, Katie Martin and Laurence Fletcher): “An industry known as the ‘widow maker’ for its ability to inflict massive losses on industrialists, despite everything, has paid off after the Bank of Japan surprised investors by changing the way it controls its government bond market. Neuberger Berman and hedge fund Caygan Capital bet the BoJ would lower its cap on bond yields. . . As a result, many investment houses bet that Japanese bonds would fall, driving up yields. “We had reached the point where this policy was no longer justified,” said Mark Dowding, BlueBay’s chief investment officer. “It was a question of when, not if. “
Geopolitical tracking:
December 18 – Wall Street Journal (Eric Lipton, Michael Crowley and John Ismay): “The prospect of developing military threats from China and Russia is leading to bipartisanship to increase Pentagon spending. . . Congress is on track next week to give final approval for a national army budget for the existing fiscal year that is expected to succeed at about $858 billion, $45 billion more than President Biden had requested. in the last two years, even after inflation, compared to an average of less than 1% consistent with the year in real dollars between 2015 and 2021. . . Procurement spending would rise sharply next year, adding a 55 percent buildup in Army investment to buy new missiles and a 47 percent increase in Navy arms purchases.
December 22 – Reuters (Hyonhee Shin): “South Korea and the United States plan to hold their first large-scale joint live-fire demonstration in six years in 2023 amid growing threats from North Korea’s military, Seoul’s Defense Ministry said. The exercises floated as South Korea and the United States discussed arrangements for their alliance’s 70th anniversary next year, ministry spokesman Jeon Ha-gyu said.
December 21 – Reuters (Yimou Lee): “Taiwan has sent fighter jets to warn 39 Chinese jets that have entered its southeastern air defense zone, the island’s defense ministry said. . . Taiwan has complained of repeated missions across the Chinese Air Force over the after-two years. Thursday’s raid included 21 fighters and 4 H-6 bombers, as well as early warning, anti-submarine and air-to-air refueling aircraft. »
Original message
Editor’s note: The summary bullets for this article were selected through the editors of Seeking Alpha.
This article written by