The epic decline in US economic output in the second quarter was the deepest dive in GDP on record that surprised exactly no one. Economists and macro models have for months been projecting a massive decline as the nation’s economy shut down to combat Covid-19. Government figures released yesterday confirmed the worst fears, which clears the way to focus on the second half of the year.
Monthly Archives: July 2020
Macro Briefing | 31 July 2020
Trump suggests delaying US election; GOP and Dems reject the idea: Reuters
No deal in sight in Congress for virus relief bill: Bloomberg
Hurricane Isaias threatens US east coast in the days ahead: NHC
Big Tech reports strong growth in earnings and revenue: WSJ
Coronavirus has strengthened power and reach of Big Tech: CNN
Eurozone GDP fell dramatically in Q2, posting biggest decline on record: DW
China’s economic recovery continues in July via PMI survey data: SCMP
Weekly jobless claims continue to rise sharply–up 1.434mm last week: CNBC
US GDP crashed in Q2, dropping 32.9% at seasonally adjusted annual rate: MW
Will A Demand-Side Shockwave Keep Inflation Muted?
It’s no small thing when a massive, supply side shock wreaks havoc across the global economy. Economic theory predicts a sharp rise in prices from such events. All else equal, if supply drops, prices are expected to rise. But all else has been far from equal in the coronavirus crisis of 2020.
Macro Briefing | 30 July 2020
No deal in sight for coronavirus relief legislation: The Hill
Fed leaves rates unchanged; plans to maintain strong monetary stimulus: CNBC
Fed Chairman Powell sees “extraordinarily uncertain” economic future: NYT
Small business sector at risk of mass closures: Reuters
Today’s Q2 GDP report expected to post historic loss: Reuters
Misinformation on coronavirus creating challenges for managing crisis: AP
Big tech takes a beating in congressional hearing: WSJ
German economy crushed in Q2 — GDP fell 10.1%: Bloomberg
US pending home sales surged in June, rising nearly 17%: CNBC
Gold rises to record high: CNN
Are Asset Class Correlations At A New Permanently High Plateau?
The coronavirus crisis reordered many things in economics and finance and you can add asset correlations to the list. After markets crashed in March, followed by a strong (so far) rebound, asset classes have continued to move with an unusually deep and broad degree of unison. High, or at least higher return correlations aren’t unusual around periods of severe market corrections. The question is whether it’s different this time in the sense that the jump in correlations endures?
Macro Briefing | 29 July 2020
Cornavirus vaccine test on monkeys offers encouraging results: NY Times
Coronavirus aid package legislation remains uncertain in Congress: Roll Call
In today’s Fed meeting, policymakers confront slipping economic momentum: BBG
Fed extends lending program through the end of 2020: CNN
Big Tech CEOs set to testify in Congress today: CNBC
US colleges increasingly opt for online classes this fall: USA Today
Europe considers if a second coronavirus wave is brewing: NBC
US consumer confidence fell more than expected in July: Reuters
Pace of US house price increase slows in May to 4.5% annually: CNBC
Real Treasury TIPS yields remain negative as downside bias persists:
This Week’s US Q2 GDP Report Will Be Ugly
Brace yourself. Although no one will be surprised by the government’s initial second-quarter economic release that’s due later this week, the numbers are widely expected to be harsh. Hope springs eternal for Q3 and beyond, but first the crowd has to digest and process the heavy loss that’s in store for Thursday, July 30, when the Bureau of Economic Analysis publishes its “advance” GDP estimate.
Macro Briefing | 28 July 2020
Republicans propose new aid package that cuts jobless benefits: Reuters
Major test of experimental COVID-19 vaccine started on Monday: AP
Democrats want ban on federal agents in US cities: BBC
World economic rebound may be stumbling as virus rebounds: Bloomberg
Economic worries drive gold price to record high: CNN
Two GOP senators announce opposition to Shelton’s nomination to Fed: WSJ
Trump national security adviser tests positive for coronavirus: Reuters
Former Malaysian prime minister found guilty in 1MDB case: WSJ
Dallas Fed: mfg sector’s rebound continued in July after record fall in spring: FWBP
US durable goods orders continued to rebound in June after steep losses: MW
Foreign Inflation-Linked Bonds Surged Last Week
Government bonds linked to inflation in foreign markets topped returns for the major asset classes, based on a set of exchange traded funds. Other slices of the offshore fixed-income landscape also delivered strong results for the trading week through July 24.
Macro Briefing | 27 July 2020
Treasury Sec. Mnuchin: GOP’s $1 trillion coronavirus relief plan ready: CNBC
Protests for racial justice flared up across US over the weekend: CNN
US consulate in Chengdu closed after Beijing retaliates for Houston: USA Today
Does coronavirus outbreak in North Korea threaten Kim’s rule? CNN
US ramps up spending on coronavirus vaccine to nearly $1 billion: AFP
Consumer survey suggests encouraging Q3 start for German economy: Reuters
Gold rises to a record high of $1900-plus per ounce: CNBC
Sales of newly built homes in US surged in June: Reuters
US economic rebounded to neutral pace in July via PMI survey data: IHS Markit
10-year real Treasury TIPS yield falls to -0.92%, below previous low in 2013:
