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SubscribeSign inShare this postWeekly Macro Summarywww.weeklymacro.comCopy linkTwitterFacebookEmailAug 9, 2020Share this postWeekly Macro Summarywww.weeklymacro.comCopy linkTwitterFacebookEmailTHIS IS NOT INVESTMENT ADVICE.&nbsp;Please speak with a registered investment advisor or other qualified financial professional before making any investment decisions.While global economic activity remains weak relative to pre-virus levels, data and high frequency indicators continue to rebound strongly. Levels of risk assets suggest a sustained recovery while sentiment measures and barometers of implied volatility suggest investors are suspicious of the recent performance in asset markets. This divergence between strong market performance and negative investor sentiment is unusual. Typically, sentiment tracks the recent performance in markets. If the old Wall Street adage is true that, “the market climbs a wall of worry”, then stock markets globally still may have more room to push higher.*Total market value of the top 5 stocks in the S&amp;P 500 has increased 266% since 2015, while the remaining 495 stocks in the index have only increased 25% over the same period.&nbsp;The Chart of the Week shows how much the expansion of the S&amp;P500, since 2015, has been driven by the 5 biggest companies in the indexIf you would like to receive this macro summary directly to your mailbox every Sunday please subscribe. It’s free Summary: Global economic data continues to surprise on the upside in August as re-openings and activity pickup while global coronavirus cases ease. Key risks remain in that US fiscal stimulus discussions are at an impasse and US-China tensions continue to escalate.&nbsp;Atlanta Fed GDPNow forecast is currently tracking at 20.5% for Q3, up from 11.9% last week.NYFed GDPNow Forecast is currently at 14.6%, down from 16.9% last week.&nbsp;Source: Goldman SachsSource: Goldman SachsUS Non Farm Payrolls:Worldwide manufacturing output rose in July at the fastest pace since Dec 2018 as increasing numbers of companies stepped up production after COVID-19 closures. The rate of growth nevertheless remains modest - equivalent to output growing just 2% per year.Rising factory production was reported in July across 20 of the 31 countries for which IHS Markit collects manufacturing PMI data, the highest proportion since December 2018 and up from just one (China) in both April and May.Source: IHS MarkitU.S. Markit manufacturing PMI rose 1.1 points to 50.9 in July versus 49.8 in June.&nbsp;U.S. ISM manufacturing index rose 1.6 points to 54.2 in July after 52.6 in June&nbsp;Source: Renaissance MacroU.S. factory orders climbed 6.2% in June following the 7.7% bounce in May from the record -13.5% dive in April. NFIB Small Business Optimism Index - Sentiment is rebounding&nbsp;NFIB: Percent Planning to Increase EmploymentEurozone composite PMI rises up to 54.9 for July vs&nbsp; 48.5 in June. Eurozone economy is back in expansion.Source: IHSSource: IHSEurozone retail sales +5.7% m/m in June. May revised to +20.3% m/m from 17.8%Eurozone Retail Sales VolumeSource: EurostatGerman factory orders +27.9% m/m in June vs 10.1% expected.&nbsp;US Total rail carloads&nbsp; +2.2% week/week as of 8/1, was +1.4% the prior week. Total carloads +29% from May’s low, still down ~9% y/y.&nbsp;Source: ChaseUS new auto sales registered +11% m/m for July. -12% y/y. Year to date, sales are down 22% versus 2019 levels.Source: ManheimG10 economies have 0 rate hikes priced in across all 10 economies for at least the next 24 months.&nbsp;Fed current philosophy: “We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates.” -Fed Chairman Powell&nbsp;WSJ's Nick Timiraos wrote a widely referenced piece this past week entitled, "Fed Weighs Abandoning Pre-Emptive Rate Moves to Curb Inflation"Vice Chairman of the Fed, Richard Clarida, on CNBC: while the economic picture remains complex his baseline outlook for the US economy is unchanged for the economy to return to pre-pandemic activity levels around Q4 of 2021.&nbsp;Bank of England on Thursday had no policy change but a small yet important change to guidance.&nbsp;USD Positioning, as measured by the DXY is at extreme bearish sentimentDollar spot index (DXY) down ~4% over the past month and down almost 10% since March.Federal Reserve Trade-Weighted USD IndicesSource: Capital EconomicsSource: Cornerstone MacroIn a new research note, Citigroup asks: “What is Gold Telling Us?”Is Gold Predicting a Burst of Inflation?&nbsp;Is Gold Presaging a Loss of the Dollar’s Exorbitant Privilege?&nbsp;Is Gold a Measure of Uncertainty and Potential Equity Rout?&nbsp;Is Gold Rising on the Fundamentals?&nbsp;Cumulative flows into precious metals ETFsThe US 10 year real yield has fallen significantly since June from -40bp to -110bpSource: Morgan StanleyThrough Friday, 89% of the companies in the S&amp;P 500 reported financial results for Q2, 2020Via Bespoke Investment Group: In Q2 Corporate Chapter 11 Bankruptcies reached their highest level since 2017. From March-June was one of the biggest corporate bond issuances in history. At its peak the 4 week moving average of corporate debt issued was ~$465bln.Source: Bespoke Investment GroupUS Junk Bond Yields are Back Below 6%Source: FTSource: Morgan StanleyCombine the FANG stocks with Apple Inc. and Microsoft Corp., and the result is a market-value powerhouse from a global perspective. The combined value of the “FANMAGs” reached $7tln for the first time Monday, according to data compiled by Bloomberg.&nbsp;Where to look at market expectations of election outcomes? Look at Banks, Drugs and Defense stocks. Price action seems to indicate a growing market belief that control of the White House and Senate is going to be taken by Democrats.&nbsp;Zillow Group Inc.Fastly Inc - Cloud ComputingEtsy Inc.&nbsp;Wayfair Inc.&nbsp;- Online Home FurnishingsUnder the Radar:Source: BofAHHS Secretary Azar was scheduled to visit Taiwan.White House is strong arming TikTok to sell itself. White House on Wednesday said it was going to try to purge “untrusted” Chinese apps from US&nbsp;UK and China Strained Relations:The most important company, for the pandemic, that you’ve never heard of: BGI is calling on international health researchers to send in virus data generated on its equipment, as well as patient samples that have tested positive for COVID-19, to be shared publicly via China’s government-funded National GeneBank.Source: WSJRaghuram Rajan, prominent economist and former head of the Reserve Bank of IndiaPictures, charts are all via Macquarie BankThis weekly summary expresses the views of the author as of the date indicated and such views are subject to change without notice. The author has no duty or obligation to update the information contained herein. Further, the author makes no representation, and it should not be assumed, that past investment performance is an indication of future results.Moreover, wherever there is the potential for profit there is also the possibility of loss.This weekly summary is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources.The author believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.This weekly summary, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of the author.Share this postWeekly Macro Summarywww.weeklymacro.comCopy linkTwitterFacebookEmailNo posts© 2022 Primary Dealer ∙ ∙ &nbsp;is the home for great writingThis site requires JavaScript to run correctly. Please or unblock scripts

SubscribeSign inShare this postWeekly Macro Summarywww.weeklymacro.comCopy linkTwitterFacebookEmailAug 9, 2020Share this postWeekly Macro Summarywww.weeklymacro.comCopy linkTwitterFacebookEmailTHIS IS NOT INVESTMENT ADVICE.&nbsp;Please speak with a registered investment advisor or other qualified financial professional before making any investment decisions.While global economic activity remains weak relative to pre-virus levels, data and high frequency indicators continue to rebound strongly. Levels of risk assets suggest a sustained recovery while sentiment measures and barometers of...

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