The Daily Shot: 21-Jun-24
• The United States
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Food for Thought
The United States
1. Initial jobless claims have been a bit firmer lately.
Source: Pantheon Macroeconomics
Continuing claims keep diverging from the trends we’ve seen in recent years.
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2. The Philly Fed’s regional manufacturing report showed a mixed picture.
• The headline index registered a slowdown.
• Demand appears to be firmer.
• Employee hours improved.
• The index of expected shipments hit the lowest level since the GFC.
• More firms are reporting higher prices.
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3. US real hourly wages have been trending higher.
4. Housing starts dipped well below last year’s levels in May.
Here is the seasonally adjusted index.
Source: @economics Read full article
• While construction activity has declined across the board, multifamily housing has been particularly hard hit. Starts are at multi-year lows, …
… down almost 52% from a year ago.
– Multifamily building permits are also at multi-year lows, …
… amid a softer rental market.
Source: Pantheon Macroeconomics
– This chart illustrates the trends in single-family and multifamily housing permits, seasonally adjusted.
Source: @TheTerminal, Bloomberg Finance L.P.
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5. The Citi Economic Surprise Index hit its lowest level since 2022.
Bloomberg’s economic surprise index is also at multi-year lows.
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6. The US dollar continues to strengthen. Bloomberg’s dollar index reached its highest level of the year.
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The United Kingdom
1. The BoE left rates unchanged, striking a somewhat dovish tone. The market expects a rate cut in August.
Source: CNBC Read full article
• Here is the market expectation for the year-end base rate.
• The pound weakened
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2. Consumer sentiment has been improving.
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The Eurozone
1. Consumer confidence improvements have been slower than expected.
2. Over the next 12 months, a large share of European consumer loans will reset to higher interest rates.
Source: BCA Research
3. Spain’s mortgage approvals hit a multi-year high in April.
4. This chart shows the negative impact of policy tightening on the euro area economy, particularly housing and business investment.
Source: TS Lombard
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Europe
1. Norway’s central bank struck a hawkish tone.
Source: @WSJ Read full article
• The Norwegian krone and Norway’s bond yields moved higher.
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2. New vehicle registrations in the EU dipped below last year’s levels.
3. Next, we have the EU-China trade in new electric vehicles.
Source: PIIE Read full article
4. Here is a look at changes in livestock populations in the EU.
Source: Eurostat Read full article
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Japan
1. The yen continues to weaken, causing unease in both Tokyo and Washington.
Source: Reuters Read full article
Source: @markets Read full article
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2. The headline CPI increased, driven by higher fuel and utilities costs, yet it remained below forecasts. Meanwhile, core inflation continues to moderate.
Source: @WSJ Read full article
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3. The manufacturing activity barely grew in June as price increases accelerated.
Source: Reuters Read full article
• Services moved into contraction for the first time since 2022.
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Asia-Pacific
1. Taiwan’s export orders remain well above last year’s levels.
2. South Korea’s exports hit a new high for the month of June.
• Here is South Korea’s current account balance with the US and China.
Source: @economics Read full article
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3. Australia’s manufacturing activity moved deeper into contraction territory.
Service sector growth slowed.
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China
1. Foreigners have been selling mainland shares.
Source: @markets Read full article
2. The credit impulse has turned negative again, largely reflecting the slowdown in social financing.
Source: Longview Economics
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Emerging Markets
1. The Indian rupee hit a record low vs. USD.
Source: @markets Read full article
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2. Mexican retail sales strengthened in April.
3. There have been wide divergences within the EM currency space.
Source: MRB Partners
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Cryptocurrency
1. So far, it has been a mixed quarter for cryptos, with Ether (ETH) outperforming and XRP underperforming top peers.
Source: FinViz
2. ETH/USD remains stuck below resistance, which prevented a swift retest of the 2021 all-time-high.
3. There has been a pickup in ETH long liquidations as the crypto pulled back from the $3,983 resistance level.
Source: Coinglass
4. Liquidity among memecoins reached an all-time high earlier this month before retreating slightly.
Source: @KaikoData
5. Stablecoin issuers have become an emerging source of demand for Treasury notes.
Source: CoinDesk Read full article
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Commodities
1. Here are some updates on copper.
• Investors remain bullish.
Source: @markets Read full article
• China is importing scrap copper …
Source: @markets Read full article
… and flooding the market with cheap copper exports.
Source: Yahoo Finance, @markets Read full article
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2. Wheat prices remain under pressure.
• Russia has been gaining wheat market share at Ukraine’s expense.
Source: @JLeeEnergy, @markets Read full article
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Energy
US inventories of crude oil and refined products declined last week.
Here are the levels.
• US gasoline demand has firmed up.
• Refinery runs eased last week.
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Equities
1. A lot of options contracts are expiring today
Source: Goldman Sachs; @WallStJesus
2. This chart shows the cumulative count of record highs by year for the S&P 500 and the S&P 500 Equal Weight Index.
3. The current bull market has caught up to the average trend.
Source: Simon White, Bloomberg Markets Live Blog
4. There has been talk of the S&P 500 hitting 6,000.
Source: @markets Read full article
The options market estimates roughly a 20% probability that the S&P 500 will exceed 6000 by year-end. The index is similarly likely to fall below 5000.
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5. Retail investors are relatively bullish.
• But retail stock purchases have slowed in recent months.
Source: Vanda Research
• Meme stocks have been sinking.
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6. The Treasury’s cash balance at the Fed has increased, …
… which tends to reduce liquidity. This chart shows the Fed reserve balances.
Source: @TheTerminal, Bloomberg Finance L.P.
• And broader liquidity growth has been tepid. Will this create a drag on stocks?
• Perhaps global liquidity will help?
Source: Simon White, Bloomberg Markets Live Blog
• What happens when short-term rates decline and investors in money market funds begin searching for the next destination for their capital?
Source: BofA Global Research
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7. The average SP 500 stock valuation discount to the index continues to widen.
Source: @TheTerminal, Bloomberg Finance L.P.
8. Here is a look at the trajectory of consensus earnings revisions.
Source: Goldman Sachs; @MikeZaccardi
9. Earnings expectations for small caps have recently increased, yet they continue to lag behind the trend for large caps.
Source: @TheTerminal, Bloomberg Finance L.P.
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Credit
1. Investors have started getting out of leverage loans as the market expects Fed rate cuts ahead (leverage loans are a floating rate product).
Source: BofA Global Research
Source: BofA Global Research
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2. Here is a look at US corporate bond issuance.
Source: Torsten Slok, Apollo
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Food for Thought
1. US Employee Motivation and Commitment Index:
Source: ADP Read full article Further reading
2. Countries offering digital nomad visas and length of stay allowed:
Source: Visual Capitalist Read full article
3. Police and sheriff’s patrol officer wages adjusted for cost of living:
Source: USAFacts
4. Youth voter sentiment on election impact in the US:
Source: Semafor
5. Change in crime rates:
Source: @Crimealytics
6. Percentage of households renting in selected countries:
Source: The Economist Read full article
7. Density of hail events:
Source: @bbgvisualdata Read full article
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Have a great weekend!
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