Posted on by The Daily Shot Editor: Lev Borodovsky

US imports of appliances surged last year

The Daily Shot: 15-Jan-21
• The United States
• The United Kingdom
• The Eurozone
• Asia – Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought

 

The United States

1. Bloomberg’s consumer sentiment index deteriorated further, driven in part by the recent events in DC. Americans are also increasingly uncertain about personal finances (2nd chart).
 

 
Households in the Midwest are particularly gloomy.
 

——————–

 
2. Initial jobless claims increased last week. Here is a comment from Oxford Economics.

We think the $300 in additional weekly benefits provided by legislation enacted late in December motivated more individuals to claim benefits.

Source: Oxford Economics  
 
Pantheon Macroeconomics expects new unemployment applications to slow in the next couple of weeks.
 
Source: Pantheon Macroeconomics  

——————–

 
3. The latest cash distributions from the government further boosted US household incomes.
 
Source: Longview Economics  
 
4. US household deposits were up 21% in Q3 relative to 2019.
 
Source: Longview Economics  
 
In dollar terms, total deposits and cash held by households and corporations (M1) are up over $3 trillion vs. a year ago.
 

——————–

 
5. Many households are struggling to pay rent.
 
Source: Nomura Securities  
 
6. US shipping activity has been ramping up in recent months.
 
Source: Cass Information Systems  
 
• Much of this increase has been driven by a spike in imports.
 
Source: @WSJ   Read full article  
 
• The largest US ports have been the busiest.
 
Source: S&P Global Market Intelligence  
 
• US imports of appliances, for example, spiked last year.
 
Source: S&P Global Market Intelligence  

——————–

 
7. Import price inflation keeps climbing, driven by a weakening US dollar.
 

 
8. The Oxford Economics Recovery Tracker declined again due to the deteriorating health situation and, to a lesser extent, weaker employment.
 
Source: @GregDaco, @OxfordEconomics  
 
The West Coast has been hit particularly hard.
 
Source: @OrenKlachkin  
 
However, there has been some good news on the COVID front.
 
• The hospitalization rate (per 100k population) appears to have peaked.
 

 
• Vaccinations are picking up momentum.
 
Source: @pearkes  

Back to Index

 

The United Kingdom

1. UK productivity has lagged behind other OECD economies.
 
Source: ANZ Research  
 
2. Here is an update on the pandemic.
 
• Hospital beds have been filling up.
 
Source: @financialtimes   Read full article  
 
• New COVID-related fatalities are climbing.
 
Source: @financialtimes   Read full article  
 
• But the number of new cases appears to have peaked.
 
Source: @financialtimes   Read full article  

Back to Index

 

The Eurozone

1. Investors are not too concerned about the deteriorating political situation in Italy.
 
• The 2yr bond yield (still deep in negative territory):
 

 
• The sovereign CDS spread:
 

——————–

 
2. Here are some updates on Germany.
 
• The yearly changes in the GDP:
 

 
• The GDP components:
 
Source: Deutsche Bank Research  
 
• State-sponsored wage support for workers, by sector:
 
Source: @BloombergQuint   Read full article  

——————–

 
3. How much did Germany’s VAT (sales tax) reduction impact the euro-area CPI?
 
Source: ING  
 
4. This chart shows the ECB’s monthly asset purchases.
 
Source: Nordea Markets  
 
5. Next, we have some updates on the labor market.
 
• Labor force growth and labor productivity:
 
Source: Alpine Macro  
 
• Productivity by country:
 
Source: Alpine Macro  
 
• Unit labor costs:
 
Source: TS Lombard  

Back to Index

 

Asia – Pacific

1. South Korean labor force has been under pressure.
 
Source: ANZ Research  
 
2. New Zealand’s housing market is hot.
 

 
3. This chart shows the Aussie dollar correlations with various assets.
 
Source: ANZ Research  

Back to Index

 

China

1. Home price appreciation remains subdued but positive.
 

 
2. Here is China’s GDP as a percentage of global GDP.
 
Source: @markets   Read full article  
 
3. Mainland investors have been buying up shares in Hong Kong (via the Stock Connect program).
 
Source: @WSJ   Read full article  

Back to Index

 

Emerging Markets

1. Philippine credit growth has stalled.
 

 
2. Indonesia’s exports surprised to the upside.
 

 
Separately, Indonesia’s new COVID cases have been climbing.
 
Source: ANZ Research  

——————–

 
3. Russia’s car sales declined last month.
 

 
4. EM economies are set for a strong rebound.
 
Source: Morgan Stanley Research  
 
5. Fiscal deficits widened sharply last year.
 
Source: IIF  

Back to Index

 

Cryptocurrency

1. Most investment managers consider bitcoin an alternative asset, according to a Bitwise survey. 
 
Source: Bitwise Asset Management   Read full article  
 
However, regulatory concerns and high volatility have prevented many investors from adding bitcoin to their portfolio.
 
Source: Bitwise Asset Management   Read full article  

——————–

 
2. Average institutional allocation to Grayscale’s digital asset productions was up sharply in Q4. 
 
Source: Grayscale Investments   Read full article  
 
3. Is it legal for central banks to issue digital currencies?
 
Source: IMF   Read full article  
 
4. Bitcoin has experienced wilder price swings on weekends due to lighter trading volumes.
 
Source: Reuters   Read full article  

Back to Index

 

Commodities

1. Corn prices continue to climb.
 
Source: @WSJ   Read full article  
 

 
Fitch expects lower corn production in Brazil and Argentina due to dry weather and export restrictions.
 
Source: Fitch Solutions Macro Research  

——————–

 
2. China’s demand for grains is surging, mainly due to restocking. 
 
Source: Fitch Solutions Macro Research  
 
3. Sugar prices were up sharply on Thursday amid tightening global supply.
 

Back to Index

 

Energy

US gasoline demand remains soft.
 
Source: Princeton Energy Advisors  

Back to Index

 

Equities

1. S&P 500 Q4 earnings per share estimates are running below the levels we saw in Q3.
 
Source: Deutsche Bank Research  
 
Deutsche Bank expects earnings beats, especially in cyclical stocks.
 
Source: Deutsche Bank Research  
 
Here are the S&P 500 earnings estimates over the next few quarters (2 charts).
 
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital  
 
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital  

——————–

 
2. Despite the recent rebound in value stocks, investors are still in love with growth.
 
Source: @bopinion   Read full article  
 
• Growth companies’ premium remains elevated.
 
Source: @ISABELNET_SA, @GoldmanSachs  
 
• Growth companies’ earnings have been outperforming.
 
Source: @bopinion   Read full article  

——————–

 
3. The momentum factor has outperformed significantly over the past decade.
 
Source: @LizAnnSonders  
 
4. If Tesla is expected to take significant market share from other automakers, shouldn’t their share prices be declining? The global automobile market isn’t growing that quickly.
 
Source: @WSJ   Read full article  
 
5. Retail investors have been increasingly focused on the top 50 options.
 
Source: @ISABELNET_SA, @GoldmanSachs  
 
The overall call option volume continues to climb.
 

 
By the way, the last time the put-call ratio was this low, things didn’t work out so well for stock investors.
 
h/t @KritiGuptaNews  

——————–

 
6. Retail investors discovered penny stocks (often based on comments on Reddit boards).
 
Source: @jessefelder, @SarahPonczek   Read full article  
 
7. Most US sectors have 90% of stocks trading above their 200-day moving average.
 
Source: Variant Perception  
 
8. Is this the bottom for large-caps’ effective tax rates?
 
Source: Snippet.Finance  

Back to Index

 

Credit

1. Investment-grade corporate bond spreads are the tightest since 2018.
 

 
The average energy-sector high-yield spread is below 500bps.
 

 
Yield-to-duration ratios have collapsed (getting paid less per unit of risk).
 
Source: @bopinion   Read full article  

——————–

 
2. The US speculative-grade default rate remains low despite the sharp rise in corporate debt-to-GDP. Perhaps the low interest rate environment has flattened the credit cycle. 
 
Source: Mizuho Securities USA  
 
3. Agency MBS spreads are lowest since 2017.
 
Source: @TheTerminal, Bloomberg Finance L.P.  

Back to Index

 

Rates

1. US reserve balances are nearing the record set early last year (the decline was mostly due to falling central bank swap balances).
 

 
2. Since mid-November, the rise in nominal yields has been driven almost entirely by inflation expectations, according to Variant Perception. 
 
Source: Variant Perception  
 
3. Taper tantrum 2.0?
 
Source: @OxfordEconomics  

Back to Index

 

Global Developments

Below are some updates on the US dollar.
 
• The current move in the dollar is closely tracking previous downtrends.
 
Source: Deutsche Bank Research  
 
• The Treasury curve has a significant impact on the dollar.
 
Source: @ISABELNET_SA, @DeutscheBank  
 
• The US dollar correlates well with the shadow rate differential between the Fed and the ECB.
 
Source: @ISABELNET_SA, @DataArbor  
 
• Short dollar positioning is the most extreme since 2017.
 
Source: Longview Economics  
 
• Here is the US dollar as a share of global FX reserves.
 
Source: @WSJ   Read full article  

——————–

Back to Index

 

Food for Thought

1. Who can work from home?
 
Source: Pew Research Center   Read full article  
 
2. Worker-related business decisions in response to the pandemic:
 
Source: @BLS_gov   Read full article  
 
3. Ignoring calls from unknown numbers:
 
Source: Pew Research Center   Read full article  
 
4. Rising global temperatures:
 
Source: @WMO, @metoffice, @neilrkaye  
 
5. Female labor force participation:
 
Source: IIF  
 
6. Maternity leave:
 
Source: IIF  
 
7. Racial and ethnic minorities on corporate boards:
 
Source: @WSJ   Read full article  
 
8. Polygamous households:
 
Source: Pew Research Center   Read full article  
 
9. Sandwich rankings:
 
Source: Food Republic  

——————–

 
Have a great weekend!

Back to Index