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Florian Kronawitter Profile picture
@fkronawitter1
Sep 29, 2022 • 6 tweets • 2 min read • Read on X
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1- #ConnectingTheDots Checking on the US Consumer

Today we got Initial Jobless Claims, a lead datapoint for the evolution of Unemployment

They went DOWN
2- Near-term credit card data suggests spending HELD UP through September - no sign of any deceleration at all
3- This is corroborated by recent trends in airfares...
4- ...and hotel bookings

h/t @LONGCONVEXITY
5- Further out, the outlook remain positive. Example Detail from Richmond Fed Manufacturing survey

Wage plans for 6 months from now remain elevated, despite a MUCH deteriorated business outlook

Why? Businesses are desperate for staff
6- Summary: Many recent datapoints continue to suggest the US consumer is in good shape

The intense adjustments necessary to rebalance the US economy will be most acutely felt in corporate profits, and abroad

End.

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More from @fkronawitter1

Florian Kronawitter Profile picture
Oct 20, 2023
Some thoughts on Treasuries and TIPS:

The 30-Year Treasury ETF ($TLT) saw record trading volume yesterday, indicating forced liquidation which often occurs near a bottom (1/5)

However, after the Quarterly Refunding Announcement on August 2nd shocked markets, it seems unlikely that large buyers step in before the next one on Nov 1
(2/5)
At the same time, it appears likely that a second front is opened soon in the Israel-Hamas war, as Israel evacuates towns in the North and builds field hospitals

An oil price spike seems likely, which would increase inflation expectations and push yields higher (3/5)
Read 5 tweets
Florian Kronawitter Profile picture
Sep 26, 2023
On the history of real rates (1/3)

Historically, many lengthy periods where real rates where depressed for a long time

Typically involved war or disease

1984-2021 the second longest on record Image
Their reversal usually lasted several years and involved considerable real rate rises (2/3) Image
However, the real rate secular trend, in the literal sense, is down (3/3) Image
Read 5 tweets
Florian Kronawitter Profile picture
Mar 10, 2023
1- 🇺🇸 Why the US regional bank issue extends beyond Silicon Valley bank

Regional banks pay 0%-1% on deposits while the FFR is 5%

Many are unprofitable if they were to pay "market" rates (!) on these deposits
2- SIVB throws this dissonance into the limelight

Customers now withdraw their deposits - why don't get paid *and* risk being stuck?
3- Regional banks have to replace cheap deposits with alternative funding

These are priced at market, or worst case the Fed discount window
Read 5 tweets
Florian Kronawitter Profile picture
Feb 6, 2023
1 - #ConnectingTheDots The Bloomberg economist consensus for January is out

Expectations are for a "hot" month-on-month number, that annualises at ~5-6%

A significant step-up from recent prints
2 - What's the reason?

Simple - many fees, bills and contracts reset in January (example below)

Inflation was very high last year, so this seasonal effect should be very pronounced this year

3 - Meanwhile, underlying inflation trends continue to weaken

Read 5 tweets
Florian Kronawitter Profile picture
Dec 15, 2022
1- #ConnectingTheDots The Fed meeting yesterday was hawkish, both the statement and Powell's press conference

The movement of FOMC members' dots - their view on high rates need to go - illustrates this well
2- This was contrary to my expectations, as "leaks" suggested ambiguity that the market would have read dovish
3- As you know, my view is that of a slowing economy, and in fact a "hard landing", as the US consumer runs out of savings

A problematic context given the global debt load
Read 5 tweets
Florian Kronawitter Profile picture
Dec 14, 2022
1- #ConnectingTheDots Markets & the economy

Let's start with the economy: There is an abundance of signs now pointing to a "hard landing"

Near term US Retail data tracks very poorly...
2- ...the European consumer is cutting back sharply...
3- ... and China is ravaged by Covid. This wave will blow over soon, but what remains afterwards? A property bubble with 20% vacancy rates
Read 9 tweets

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