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- Opening Belle - U.S. Budget 'Fast-Tracked', NFP's & Vaccine Passports
Opening Belle - U.S. Budget 'Fast-Tracked', NFP's & Vaccine Passports
The Opening Belle - in partnership with Utrust - power your business with crypto
Green on the screen ahead of the NFP's - risk sentiment still buoyant.
Bringing back 'stimulus hopes' for today's narrative - always a winner...
Market Snapshot
There is at least some stimulus chatter in the news...
A 15 hour mammoth session of amendments and debates led to a breakthrough yesterday - and a headline...
It's progress, but there's a long way to go. - Harris had to use her tie-breaking vote to push the legislation through 51-50.
Some points are starting to take shape...
Nearly every senator approved a vague amendment to ensure $1,400 stimulus checks would not go to āupper-income taxpayersā
Democrats and Republicans approved measures aimed at helping restaurants during the pandemic, raising public awareness about vaccine administration, helping rural hospitals, and not hiking taxes on small businesses during the health crisis.
There seemed to be agreement on ensuring undocumented immigrants donāt receive stimulus checks, although Democrats later stripped this out, in addition to provisions expressing support for fracking and the Keystone XL pipeline.
Romneyās proposal would provide $4,200 per year for every child up to the age of 6, as well as $3,000 per year for every child age 6 to 17.
Senior Democrats are currently drafting legislation as part of their $1.9 trillion stimulus proposal that would provide $3,600 per year for every child up to the age of 6, as well as $3,000 for every child age 6 to 17.
U.S. Employment - NFP's
Yesterday's weekly jobless figures came in better than expected.
The economy has regained about 12 million of the 22 million jobs that were lost in March and April 2020, although it is still far too early to draw conclusions about either reopening or any 'permanent scarring' to the labour market...
The decline in the number of continuing #unemployment benefit claimants over the past few months is positive but:
1. No progress since Thanksgiving
2. About 1/2 of decline in regular claims since Sep 1 represents people moving to extended benefits
3. PUA claims still very high pic.twitter.com/IyJocXN5N4ā Gregory Daco (@GregDaco) February 4, 2021
It will still be (at least) a few months until the employment picture clears
Another tidbit: 1 thing that puzzled us about our data during the spring/summer was underperformance of the software industry relative to the overall labor market. But more recently, hiring in that industry has kept growing even as the rest of the US labor market stalled. 4/5 pic.twitter.com/8tjysgbZbKā Guy Berger (@EconBerger) February 4, 2021
What does the recent data mean for NFP's?
Goldman Sachs upped their forecast yesterday...
"Following the better than expected jobless claims, ADP, and ISM employment component data, we boosted our nonfarm payroll forecast by 75k to +200k"
Economic calendars have the Reuters survey forecast of 50k, but expectations are actually quite a bit higher...
šŗšøšÆ Primary Dealer #NFPGuesses
TD +400K
NatWest +300K
Citi +250K
Nomura +250K
SocGen +215K
BoA +200K
GS +200K
JPM +200K
RBC +200K
UBS +200K
MS +175K
BNP +150K
HSBC +125K
Mizuho +125K
Scotia +100K
WF +60K
Daiwa +50K
DB +50K
BMO 0
Jefferies -80K
Barx -100K
CS -100K
Median: +162.5Kā Anthony Barton (@ABartonMacro) February 5, 2021
Looking at those expectations, a print of +50k would likely be a disappointment...
Time To Leave TINA?
BofA make the case...
āThe long-standing bullish mantra for stocks has been āThere is no alternativeā or TINA. .. But our rates strategistsā forecast for a 10-yr yield of 1.75% by year-end renders TINA less compelling.ā
āA move higher in rates, forecast by our rates team, would likely be most painful for themes that have thrived over the last few decades,ā
āBoth ends of the equity duration spectrum are at risk: long duration growth stocks that benefited from a falling discount rate could suffer a reversal of fortune. And short duration high-coupon stocks with no room to raise dividends would pale relative to bond income.ā
Or, put another way...
"Currently, >60% of stocks in the S&P carry a dividend yield higher than the 10yr Treasury...Should benchmark rates climb to 1.75% by yr end - BofAās current house view - that total would drop to 44%, making the bullish TINA mantra for stocks āless compellingā" - h/t @kgreifeldā Michael Brown (@MrMBrown) February 5, 2021
Something to look out for later in the year...
Make America Make Again
Spot the theme...
And at the end of last year...
Apple is accelerating their production shift away from China too, with India & Vietnam the main beneficiaries so far...
That's the report from The Times, although Boris Johnson later commented that 'there are no current plans to roll out vaccine passports, but will be keeping the situation under review'...
British officials have started work on a āvaccine passportā as Greece prepares to waive quarantine rules for tourists who can prove that they have been inoculated against coronavirus.
A certification system is being planned, The Times has learnt.
The Foreign Office, Department for Transport and Department of Health and Social Care are working on options for travellers to countries that may demand it as a condition of entry.
British tourists may be welcomed to Greece in May provided they can provide proof of inoculation against the coronavirus, tourism officials said.
May keeps coming up, with reports that local elections will be held and the Governments 'internal target' to vaccinate over 50s...
Could May see the return to normal? š¤
Diginex & Equos are going from strength to strength - the first Nasdaq-listed company with a cryptocurrency exchange is making institutional-grade infrastructure available to everyone.
Check out their Lunar New Year competition! Trade on Equos from now until February 8 for the chance to enter 4 prize pools of 10 ETH, 3 BTC, and 12500 USDC...
Want to know more? COO Neil Sheppard had a chat with Anthony Pompliano...
New episode with @DiginexGlobal COO Neil Sheppard is live!
- Diginex
- Derivatives
- Risk management
- Capital efficiency
- Crypto exchange Equos
Enjoy!https://t.co/RQWlN0jlc4ā Pomp šŖ (@APompliano) February 4, 2021