MTS Insights

Choppy trading continues for the Turkish lira after President Recep Tayyip Erdogan was elected once again on Monday. As the status quo was kept, the lira strengthened about 4.0 percent early in the trading day but quickly capitulated to weakness giving back most of the progress it had made on the US dollar. The depreciating lira is leading to troubling trends in Turkey’s core inflation and price indexes. The Turkish Central Bank discusses this in its “ Monthly Price Developments. ” In general, May consumer prices grew by 12.15 percent on an annualized basis, 1.3 points higher than the April number of 10.8 percent. The Turkish central bank saw two main forces on prices in this period. Primarily, the depreciation of the lira deteriorated purchasing power for consumers as imported goods have become more expensive. Besides the direct threat of currency deflation, the central bank also pointed to rising commodity prices affecting inputs on most major consumer goods. D - CPI exclud...

Last year, Boeing and Airbus published market outlooks through the year 2036. In their report, Boeing described the industries long-term demand as “robust” with an average annual passenger growth of 4.7 percent over the next 20 years while Airbus forecasted a 4.4 percent rate of growth. Boeing noted that over the next two decades China’s fast growth will make it the largest domestic market in the world while the rest of Asia will become the largest market for travel. From Boeing and Airbus Expected new deliveries by Airbus in the next 20-years fall just short of the 35,000 mark. With an existing produced fleet of just 18,890 aircraft as of Q1 2017, this growth appears substantial. Airbus is expecting to replace 12,936 aircraft in their fleet by 2036 and is expecting new growth to reach 21,230. Boeing is forecasting new deliveries to more than double over the next two decades. In order to meet the demand, they are forecasting a need for over 41,000 new deliveries. This will a...

Since the beginning of the year, the Russell 2000 small-cap index has been one of the bright performers out of the indices. With YTD returns of 10.13 percent on June 20th, only the NASDAQ, at 11.06 percent, has outpaced it since January 2nd. In comparison, the S&P 500 large-cap index and S&P 400 mid-cap index have returned 2.65 percent and 4.4 percent so far this year. Investors have made it clear they have preferred shares of smaller companies so far in 2018. Data from the Thomson Reuters/PayNet small business reports present data that suggests stronger credit trends in the small business sector could explain some of the bullishness. The pair of data analytics companies aggregates lending data from firms that represent “Main Street” and presents its findings in their “ Small Business Credit Outlook ” and “ Small Business Credit Monthly Report .” The PayNet website also includes historical data sets for the Small Business Lending Index (SBLI) and Small Business Delinque...

Caixa Bank Research’s latest report on the international economy provided insight on the fragility of emerging markets. On June 14th, 2018, the Argentine Peso and the Brazilian Real lead the weakness in emerging market currencies falling 6.1 percent and 2.2 percent on the day. A down day that comes just a day after the Federal Reserve raises rates and reaffirms its hawkishness through the rest of the year. Emerging market currencies have not just had a weak past 24 hours. Since the beginning of May, Caixa reports that “the Argentine peso has depreciated nearly 20% against the US dollar, the Turkish lira more than 10%, and a large number of currencies (including the Polish zloty, the Brazilian real, the Mexican peso, the Chilean peso and the Colombian peso) have depreciated by between –6% and –4%.” The numbers are quite staggering and suggest the hawkish trend in U.S. interest rates is viewed as a crisis-level threat to the stability of emerging markets’ financial systems. Cai...

Using the World Trade Organization's Trade in Commercial Services  bulk data set, the graphic shows each country's available trade data for each category and calculates the top 5 similar countries based on their trade profiles. Each country has an "export" and an "import" profile as well as 5 similar countries for each type of profile. Similar countries will have similar distributions based on the trade categories normalized for size. Check out the viz on the official Tableau page here .

This week, President Donald Trump announced multiple tariffs on some of the United States most active trading partners. Temporary tariff assignments were set to expire on Thursday, and following that expiration, a confirmation that a 10 percent tax on aluminum imports and a 25 percent tax on steel imports was released. Responses were mostly negative on domestic and international fronts with the exception of a positive reception by U.S. aluminum and steel producers. The consensus is that the costs will be passed on to consumers as tariffs will reduce the amount of foreign competition in domestic markets. Two weeks before the trade announcements, the World Trade Organization’s (WTO) “ World Trade Outlook Indicator ” suggested a world trade environment that was contracting slightly. The reading fell from 102.3 in February to 101.8 in March. Six components are used to make up the indicator. All of the data points measure trading activity of different means and different produ...

Moody’s is one of the big three credit rating agencies besides Standard & Poor’s and Fitch Group. Investors around the world look to Moody’s to properly assess the financial health of U.S. companies and therefore the risk in U.S. equities. The well-respected organization also posts weekly reports and analysis on various rates and credit data. Weekly, it outlines the biggest issues in the credit and risk in its “ Credit Markets Review and Outlook ” typically written by its chief economist, Jon Lonski. This week, the report highlights some dynamics in the equity market that show some sensitivity to certain indicators in the credit market. Since the beginning of 2018, the market has been relatively volatile coming off highs in late January. The worst seems to be over, but the S&P 500 appears to be locked into a trading range. Moody’s analysis suggests the market will resume its growth based on falling default rates. Moody’s states that “roughly 88 percent of the 209 yea...