Saudi Arabia is going to maintain its oil production cut for another 3 mo (1mm barrels/day reduction). Russia also extended its own export limits (300k/day reduction). Oil hit $90/barrel.
BBG is out with a story discussing the differences between employees across the world as it relates to work from home trends. Because Asian countries had more limited challenges during the first year of the pandemic, employees didn’t get used to WFH like their US counterparts who are dragging their feet. Interestingly, the UK has one of the highest levels of remote work, with France one of the lowest, in Europe. The article is long and thoughtful, talking about differences in culture, technology, government, gender preferences, and other key variables. Bottom line is that the genie is out of the bottle.
GS just reduced their forecasted odds of a US recession to 15% (vs 20% previously), due to lower inflation and a solid labor market. Bloomberg consensus is at 60%. At the same time, MS’ Wilson is cautioning that the US stock market will be down because of a poor economy in the US later this year, per Bloomberg.
Per DB, US equity futures positioning is very different between asset managers and levered funds.
China’s services sector grew at a turtle pace, per Bloomberg. Even though Country Garden paid interest on their two dollar bond just before the expiration of their 30-day grace period, markets were down in China. Investors, per Bloomberg, are concerned about the debt crisis in the country, especially in relation to their private developers.
Bloomberg MLIV’s Boyd notes that the worst of junk bonds have rarely looked so risky, with Net Debt to EBITDA the highest in a decade for triple C debt.