The Daily Shot: 30-Apr-24
• The United States
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. the Dallas Fed’s manufacturing survey continued to indicate contraction this month.
However, the headline measure is misleading. The Texas-area factory activity is rebounding.
• Expected employment:
• Production:
• New orders:
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2. The labor market continues to show signs of loosening, with the rate of job switching at its lowest since the COVID shock.
Source: @economics Read full article
• This chart shows sectoral trends in US white-collar job postings.
Source: @BW Read full article
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3. Goldman anticipates that core PCE inflation will stabilize above 2.5% in the coming months.
Source: Goldman Sachs; @MikeZaccardi
• Auto insurance price gains are expected to slow.
Source: Goldman Sachs; @MikeZaccardi
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4. Here is a look at Fed rate cut probabilities at this year’s FOMC meetings.
Source: Alpine Macro
5. The profit margin gap between small and large firms has been widening.
Source: @IanRHarnett
6. The US budget deficit remains very wide …
Source: Barclays Research
… due to rising interest expense.
Source: Barclays Research
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The United Kingdom
1. UK shop price gains have been slowing sharply.
2. There has been a broad increase in the surplus of housing stock. (2 charts)
Source: Longview Economics
Source: Longview Economics
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The Eurozone
1. Germany’s inflation edged higher this month.
Source: @economics Read full article
• Germany retail sales improved in March.
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2. Spain’s headline inflation also increased, but the core CPI continues to slow.
Source: @economics Read full article
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3. The French first-quarter GDP growth was a bit firmer than expected. Germany’s and Italy’s GDP reports also topped forecasts. We will have more on the euro-area GDP tomorrow.
• French consumer spending on goods increased in March.
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4. Euro-area business sentiment declined this month, with manufacturing firms particularly gloomy.
Here is the Economic Sentiment Indicator, which includes consumer sentiment.
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Europe
1. Sweden’s GDP indicator signals a third consecutive quarterly GDP decline.
• Retail sales edged lower in March.
• Wage growth is at multi-decade highs.
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2. BCA Research expects an earnings contraction next year, especially for the largest gainers in the Euro Stoxx 50 that have generated the bulk of the index’s earnings growth. (2 charts)
Source: BCA Research
Source: BCA Research
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3. This chart shows foreign languages most commonly studied in upper secondary education in the EU.
Source: Eurostat Read full article
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Japan
1. Did a BoJ intervention cause the massive reversal in dollar-yen?
Source: @markets Read full article
• The decision to intervene is reportedly more about the pace of change in the exchange rate rather than its level.
Source: Masaki Kondo; @TheTerminal, Bloomberg Finance L.P.
• Here is the daily trading range.
• This chart shows USD/JPY and the 10-year rate differential with the US.
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2. Japan’s industrial production topped expectations, boosted by the transportation sector.
Source: Reuters Read full article
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3. Retail sales surprised to the downside.
4. The unemployment rate held steady, but the jobs-to-applicants ratio unexpectedly increased in March.
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Asia-Pacific
1. South Korea’s industrial production unexpectedly dropped last month.
2. Australian retail sales surprised to the downside.
• Credit growth is rebounding.
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4. New Zealand’s business confidence is rolling over.
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China
1. Beijing has been instructing banks to avoid accumulating long-term government bonds, aiming to prevent a situation similar to the SVB experience in the US.
Source: @markets Read full article
This latest policy sent bond yields higher.
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2. China’s business surveys signal ongoing growth in the nation’s business activity.
• Official PMIs (in growth territory):
• The S&P Global China Manufacturing PMI:
Source: Reuters Read full article
• The World Economics All-Sector SMI:
Source: World Economics
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3. Persistent deflation could weigh on earnings.
Source: BCA Research
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Emerging Markets
1. Economists have been upgrading their forecasts for Brazil’s GDP growth this year.
2. Thailand’s factory output has been deteriorating.
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3. EM currencies are highly exposed to US rates.
Source: Alpine Macro
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Cryptocurrency
1. Bitcoin’s market cap relative to the total crypto market cap (dominance ratio) continues to trend higher.
Source: @StocktonKatie
2. Bitcoin’s market value relative to its realized value (MVRV) is at the highest level before historical halving events. This could reflect a relatively higher starting valuation from the ETF hype and broader risk-on environment.
Source: @glassnode
3. Crypto funds saw the third consecutive week of outflows by incumbent (Grayscale) and new spot-BTC issuers. (2 charts)
Source: CoinShares Read full article
Source: CoinShares Read full article
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Commodities
1. Copper continues to rally.
2. Are lithium prices about to move higher?
Here is the Global X Lithium & Battery Tech ETF.
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3. Speculators are very bullish on gold, although positioning is not yet extreme.
Source: BCA Research
• Gold is trading at a premium on the Shanghai Exchange relative to the US-based Intercontinental Exchange (ICE), and ETF holdings have diverged between the two markets.
Source: BCA Research
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4. Cocoa futures saw a sharp pullback on Monday.
Source: @markets Read full article
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Equities
1. In the current earnings season, EPS surprises have been the highest since 2021 (so far).
Source: Morgan Stanley Research; @carlquintanilla
2. The dispersion in US earnings results remains elevated.
Source: BlackRock Investment Institute
3. Elevated Treasury yields have been a drag on market breadth.
Source: @TheTerminal, Bloomberg Finance L.P.; h/t Michael Kantrowitz
4. This chart shows economic growth and inflation sensitivity across US sectors.
Source: Stifel
5. Hedge funds have been accumulating tech shares.
Source: Goldman Sachs; @dailychartbook
• Investors continue to rotate to tech from other sectors.
Source: Deutsche Bank Research
• Major DM tech sectors continue to exhibit high valuation premiums relative to their local markets vs. pre-pandemic medians.
Source: @GinaMartinAdams
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6. How did different sectors perform during the 1973-74 oil shock?
Source: BofA Global Research; @MikeZaccardi
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Credit
1. Fewer banks report tightening lending standards on business loans.
Source: Bank of America Institute
2. The US median corporate debt-to-equity ratio is substantially lower than peers in the Eurozone, Japan, and China.
Source: BCA Research
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Global Developments
1. This chart shows bank commercial real estate exposure in select countries.
Source: IMF
2. Here is the Oxford Economics central bank hawkishness index.
Source: Oxford Economics
3. Leading indicators continue to signal an acceleration in global factory activity (2 charts)
Source: @TheTerminal, Bloomberg Finance L.P.; h/t @michaelmottcm
Source: BofA Global Research
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4. Here is a look at total factor productivity across the world.
Source: @financialtimes Read full article
5. This chart illustrates the resilience in asset prices amidst economic policy uncertainty.
Source: IMF
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Food for Thought
1. Largest health insurers’ revenue as a share of US health spending:
Source: @axios Read full article
2. States with the highest premature birth rates:
Source: Birth Injury Lawyers Group
3. The correlation between obesity and mortality rates:
Source: Tema
4. Surge in mortality rates among the elderly incarcerated population in 2020:
Source: The Marshall Project Read full article
5. Solar power land use footprint in the UK:
Source: Carbon Brief Read full article
6. Generational and political perspectives on TikTok regulations in the US:
Source: Statista
7. Downtown visitor activity:
Source: @axios Read full article
8. Ice cream production in the US:
Source: @stlouisfed Read full article
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