Eurodollar University

Something big happened in late November, impacting markets all around the world. Responsible for the crash in currencies, the collapse in some interest rates, maybe even some modest upset over in the stock market. We have a number of clues to go off, a few suspects to analyze. Eurodollar University's Money & Macro AnalysisCNBC Trump vows an additional 10% tariff on China, 25% tariffs on Canada and Mexicohttps://www.cnbc.com/2024/11/26/trump-vows-an-additional-10percent-tariff-on-china-25percent-tariffs-on-canada-and-mexico.htmlTruth Social https://truthsocial.com/@realDonaldTrump/posts/113546215408213585https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

There are huge numbers being thrown around the stock market. Normally you can just ignore them since share prices go up almost no matter what. But these imbalances are now too big to simply dismiss and key sectors in the equity market aren't buying them. Eurodollar University's Money & Macro AnalysisWSJ Stocks on Pace for Best Two Years in a Quarter-Centuryhttps://www.wsj.com/finance/stocks/stocks-on-pace-for-best-two-years-in-a-quarter-century-c5b5f9b3NYT Wall St. Sees More Gains Ahead After Another Bumper Year for Stockshttps://www.nytimes.com/2024/12/31/business/stock-market-2025-predictions.htmlMotley Fool Prediction: The Artificial Intelligence (AI) Bubble Will Burst in 2025. Here's Why.https://www.barchart.com/story/news/30123360/prediction-the-artificial-intelligence-ai-bubble-will-burst-in-2025-heres-whyECB Financial Stability Review November 2024https://www.ecb.europa.eu/press/financial-stability-publications/fsr/html/index.en.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The auto industry faces a storm as Chicago's market plunge raises alarms. Widespread layoffs and plant closures signal deep economic distress. With falling demand for cars, automakers struggle to adjust amidst lingering pandemic effects. The overcapacity crisis reflects broader recession fears, leaving manufacturers in a precarious position. In this climate, even major players like Honda wrestle with strategic decisions, highlighting the tumultuous shifts within the industry.

The biggest surprise of 2024 wasn't any election results nor was it the fact central banks worldwide are more desperately accelerating rate cuts as the year draws to close. Or that other governments and officials are resorting to increasing panicky measures to calm markets in their areas. What caught everyone so off guard about '24 was the one outcome that stands behind all of those things. Eurodollar University's Money & Macro AnalysisIMF WEO January 2024https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The Indian rupee has hit a new low, sparking discussions about its implications on the global economy. The Reserve Bank of India is shifting strategies, moving away from targeting speculators and focusing on fundamental issues. The podcast highlights the misalignment between common beliefs and the reality of the rupee's fall. As importers rush to stockpile dollars, the overall impact on international markets becomes clearer. Global economic fundamentals are revealed to be the real culprits behind this currency decline.

American workers face a hiring freeze with no end in sight. Despite seeming economic recovery, job opportunities remain scarce. The podcast delves into alarming job market statistics from 2024, comparing them to past downturns in 2001 and 2008. It highlights the stark contrast between rising job applications and stagnating employment. Consumer confidence has also taken a hit, leaving many job seekers feeling frustrated and anxious about their prospects.

Major shift in the Treasury curve with a critical spread uninverting for the first time in years. Bonds and central banks are on the move, which leaves some of Treasury market going the wrong way. And the only reason is Jay Powell. From swaps to other bonds, even something called term premia, the Fed is in the dark while bonds are lighting up. Eurodollar University's Money & Macro AnalysisFRBNY Term Premia calculationshttps://www.newyorkfed.org/research/data_indicators/term-premia-tabs#/interactiveBloomberg Treasury ‘Term Premium’ Gauge Positive for First Time Since 2021https://www.bloomberg.com/news/articles/2023-09-27/treasury-term-premium-gauge-positive-for-first-time-since-2021https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Chinese bond yields are plunging, prompting discussions about market safety and global economic impacts. The disconnect between the People's Bank of China's announcements and real market reactions raises eyebrows. Meanwhile, challenges within China's economy, including shaky banking policies and dubious fiscal efforts, are brought to light. The risks of insurers heavily tied to struggling real estate developers add another layer of complexity to the situation.

Steve Van Metre, an expert in economics and financial markets, warns about alarming trends in the U.S. labor market. He reveals that job finding rates have sharply declined, signaling potential recession risks. The discussion examines the grim relationship between job openings and unemployment, and how rising unemployment could impact consumer spending. Van Metre emphasizes the need for the Federal Reserve to consider rate cuts amidst these challenges and highlights the disconnect in labor market expectations post-election.

Brazil is trapped in a financial nightmare, with the government pointing fingers at speculators as the crisis spirals. The chaos isn't isolated; it's sending shockwaves through the global economy. While the U.S. markets seem unfazed, a leading investor is hoarding cash, hinting at underlying anxieties. The correlation between markets reveals troubling trends, including rising unemployment in the U.S. and a crumbling Baltic Dry Index, suggesting that Brazil's turmoil could signal broader systemic risks ahead.