Comments
Transcript
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NGDeclaration of recession over is absolutely laughable. We are just getting to the point where companies strapped for cash, and still lacking cash flows (tourist reliant industries, restaurants, bars, etc) will be coming into the crunch period where gov support is expiring, yet no vaccine/reliable treatment exists - i.e. restaurants and the like will be no where near full capacity, while the fixed costs are still the same. Are they even considering how long it will take to return to GDP at Q4 2019 numbers? Even JPOW is painting a bleak picture for that fact....and you have to figure they always are on the optimistic/outright lying side of things.
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SJEd’s “wokeness” bleeds into his commentary. 👎🏼
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VKAsh, it would be more fun if you made trading theories and bets of your own as well. But anyway u r are already great!
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DBEd is ready to join the CNBC cheerleaders professing the recession is over with the release of one metric. Remember the adage: two data points don't make a trend. Let alone one.
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MEAppreciate the effort guys, but your analysis and takeaways need improvement. Calling the recession over based on a one month increase in retail sales from a total lockdown the previous month is both superficial and misleading. We all know it's a shit storm out there, so let's not kid ourselves and try to put lipstick on a pig, regardless of what's happening in the heavily Fed-manipulated financial markets.
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CAGents, Appreciate your analysis but not sure about the 'recession is over' comment. Isn't a recession two consecutive quarters of declining GDP?? If it was -5% in Q1 in the US, with barely 3 weeks of lockdown in Q1, how can the recession be over when the economic activity in Q2 has been more depressed than Q1. Not to mention:- i) May's retail sales may be more down to pent up 'one off' demand rather than anything sustainable and ii) the 17.7% May jump was month on month (which is meaningless at the best of time vs YoY) and comes off a 16.5% decline in April's numbers
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MLGreat briefing, Ed does that plant behind you need water?
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PCIf the recession is over and a full recovery is what the numbers tell us (regardless of the recovery speed itself), why is Powell claiming that the downturn is not over yet? Does he need backing for continued spending regardless of the recovery so will he basically tell the same story to congress every time? I think he needs it to keep the markets from collapsing. The balance sheet expansion slowed last week and we saw the result: a massive VIX peak and a sudden decline in markets. The repo markets also peaked at 120 billion per day. I wonder if there is anything that can force him to stop flooding the market because it looks like the only real risk for the market.
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SW4,300 for S&P is my target in next two years
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DACapitalism without bankruptcies is like paying people not to work: Great retail sales today, at the cost of economic growth in the future. Socialism, including central banks picking winners and losers, has not worked in Japan or Europe for decades, why should we expect central planning by bureaucrats to increase productivity (aka GDP) in the US? At some point earnings will matter.
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ANWinter is coming.
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TSwhere can I find Ed's credit report that was mentioned during the briefing ?
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RSNeed to be careful on the data flowing on the 'new' drug saviour and firstly ask what gold standard trial protocols have been adhered too and which have not - the trial is not double blinded. Secondly, the 1/7 death save rate is obviously good from a 'save a life perspective' for those on ventilators, but its still a fairly low number. The data not being subject to double blind treatment, has the potential to blow that number out to futility. Perhaps another hydroxychloroquine moment. Wait for full blown gold standard (double blind, random, placebo, multi-centre, multi-phase, predefined tria objectives), FDA endorsed, peer reviewed trials, which take years (unless there is already pre-existing trial data to overlay supported FDA endorsed Phase 3 trials).
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JSThe recession could be technically over but that doesn't mean the equity market makes any sense right now. eventually... pop
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MHCalling that the recession is over based on one month numbers on just one specific thing ie. retail sales seems pretty weird to me. To me one month of growth is not sufficient to be out of the recession, you need a quarter of growth to call that. We'll see but I don't expect Q3 to show growth in GDP and if that is the case you can not say that we were out of the recession in June just because we had one month of growth in May.
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RKWhy shouldn't you be in risk assets when FED has your back you ask? Perhaps because you can lose 30% any time? I feel pumping the bullish narrative here and joining momentum at this stage of the rally is just not responsible..
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SKWhere can I find/get Ed's credit writedowns newsletter?
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IPif the FED has got your back, why should analysts or money managers or financial advisors exist at all? the fed could just assign us a passive portfolio that we buy and hold right?
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SLgreat stuff as always
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ASIt's really starting to sink in how unconscionable the Fed buying corporate bonds is when you consider main street being crushed.
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CMNot sure how people are analyzing these numbers. Ed, can't buy into the recession is over theory based on retail sales today. Numbers are going to be all over the place. Third quarter, we might technically be out of the recession just due to the fact that GDP has to be higher than the second quarter. But will the fourth quarter be up? So is this a double dip or just one continuous recession?
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CMOn Covid, just read that hospitalizations in Tennessee are at their highest levels ever. Problems particularly bad in Chattanooga and Memphis. Nashville already slowing down re-openings.
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VLI feel we might look back at this time in markets in ten or twenty years and think: "What the hell was everyone thinking?". It might well go further but I'm convinced there's something profoundly unhealthy and thus unstable at the core of these bullish moves across the asset classes.
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ANCan someone explain to me why HYG is levitating along with LQD? My understanding is that the Fed will not buy the components of HYG (non-angelic junk), so why is the market acting like it will?
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JHGood briefing, as always. As an aside, I recommend Hawaiian shirts. The Summer Solstice is on Saturday.
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MCBetter today gents. It was more engaging and more focussed than yesterday. 🙏
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RALove the new intro Music. Mr. Cooper’s intro was excellent...again. The point I was waiting for that I didn’t hear discussed was Powell’s “cover rationalization” for buying the Large corporation’s bonds and keeping big fat indebted Zombies alive—“they are large employers and if we let them go more unemployment will result....and err, err, you know....full employment is our second mandate”. Let me see if I’ve got this right?....you want to keep people employed in unproductive non competitive companies rather than have a “cleansing” and have people employed in innovative and productive companies that would take the place of the Zombies.....if they could just get some funding which they can’t because you used all the sop for the Zombies. It’s pretty obvious Jay what you are doing so perhaps you could spare us the hypocritical “inequality” rhetoric. I think Ed really nailed it.
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DSGood into Mr. Cooper. It will be interesting to see the rights of the Fed loans will be in a corporate bankruptcy. Will the Fed have priority before any other bondholders will be paid. Will the repayment of the Fed take priority over pension, payroll and vendor claims. It will make a difference in the risk of employees, vendors and other bond holders. DLS
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MDSolid briefing today lads. Thanks. Nice intro from Peter too. Thanks for the last comment Ash on negative interest rates.
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MSRoger on holiday?
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BSSeems like dollar / inflation regime shift is dependent on high demand / short supply of commodities ... Where's the high demand and short supply for commodities? Don't see it
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NLPeter, Ash and Ed - great stuff. Thanks.
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MRmkt seems to discount any negatives of 2 of the largest countries on the globe butting heads. excellent discounting mechanism equity mkts have become?!?!!?
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DSSorry, Good Intro Mr. Cooper. DLS
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DSGood into Mr. Cooper. It will be interesting to see the rights of the Fed loans will be in a corporate bankruptcy. Will the Fed have priority before any other bondholders will be paid. Will the repayment of the Fed take priority over pension, payroll and vendor claims. It will make a difference in the risk of employees, vendors and other bond holders. DLS