US COVID deaths lowest since the start of the pandemic

The Daily Shot: 06-Apr-21
The United States
Canada
Europe
Asia – Pacific
China
Emerging Markets
Commodities
Energy
Equities
Credit
Global Developments
Food for Thought



 

The United States

1. The ISM Services PMI surged in March, hitting a record high.
 

 
Here is the attribution.
 
Source: Oxford Economics  
 
Service firms increased hiring, a trend we saw in March the employment report.
 

 
New orders jumped.
 
Source: Piper Sandler¬†  
 
The index measuring prices paid hit the highest level since 2008.
 

 
A similar indicator from IHS Markit also showed strength in service-sector activity and …
 

 
… increasing price pressures.
 

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2. Factory orders declined in February for the first time in ten months. Based on the PMI reports, we should see a rebound in March.
 

 
3. Residential construction spending pulled back from the highs in February. Nonresidential expenditures have been shrinking.
 

 
These charts show commercial real estate construction trends over the past couple of decades.
 
Source: Mortgage Bankers Association  

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4. Next, we have a couple of updates on the housing market.
 
Tightening mortgage credit:
 
Source: @WSJ   Read full article  
 
Housing inventories:
 

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5. Here is a summary of the proposed infrastructure bill.
 
Source: @adam_tooze, Pittsburgh Post-Gazette   Read full article  
 
Government investment in structures has been trending lower for decades.
 
Source: Moody’s Analytics  
 
This chart shows the economic multipliers of different types of government programs.
 
Source: Moody’s Analytics  

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6. Historically, nominal GDP growth has declined as government debt increased.
 
Source: Stifel  
 
7. Households’ financial vulnerabilities have eased.
 
Source: Morning Consult   Read full article  
 
8. Travel-related online search activity is rebounding.
 
Source: Arbor Research & Trading  
 
9. US COVID-related deaths are at the lowest level since the start of the pandemic.
 
Source: @NateSilver538   Read full article  


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Canada

1. Consumer confidence keeps rising.
 

 
2. USD/CAD held long-term support as the US economic expansion accelerates.
 
h/t Robert Fullem  
 
3. The BOC’s ownership of shorter-maturity bonds is approaching 50% of outstanding.
 
Source: J B, Goldman Sachs  


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Europe

1. EUR/GBP dipped below 0.85, with traders betting on the UK’s strong vaccination program translating into economic outperformance vs. the Eurozone.
 

 
2. The latest TLTRO tranche saw substantial uptake from banks, sharply boosting the ECB’s (Eurosystem) balance sheet.
 

 
3. Switzerland remains in deflation.
 

 
Swiss retail sales tumbled in February.
 

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4. Central European manufacturing activity continues to strengthen.
 
Poland:
 
Source: IHS Markit  
 
The Czech Republic:
 
Source: IHS Markit  

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5. Poland’s inflation surprised to the upside.
 

 
6. Sweden’s factory activity accelerated last month.
 

 
7. European banks are less exposed to Turkey than they were a few years ago.
 
Source: BCA Research  
 
8. Here is Bloomberg’s innovation index.
 
Source: @business   Read full article  


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Asia – Pacific

1. Japan’s household spending remained tepid in February.
 

 
2. Seoul housing prices have surged in recent years.
 
Source: Bloomberg   Read full article  
 
3. New Zealand’s visits to workplaces have almost fully recovered.
 
Source: @WSJ   Read full article  
 
4. Australia’s job ads continue to rise, pointing to a strengthening labor market.
 

 
Source: ANZ Research  


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China

1. The service-sector PMI report from Markit was better than expected.
 

 
Businesses are increasingly upbeat.
 

——————–

 
2. Construction activity rebounded last month.
 
Source: Moody’s Analytics  
 
3. The surge in industrial prices has not coincided with a spike in social financing.
 
Source: BCA Research  
 
4. The slowdown in domestic industrial orders could lead A-shares lower.
 
Source: BCA Research  


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Emerging Markets

1. New COVID cases in India hit a record high.
 
Source: @axios   Read full article  
 

 
Nonetheless, factory growth held up well last month.
 
Source: IHS Markit  

——————–

 
2. Turkey’s inflation keeps climbing, with the core CPI approaching 17%.
 

 
3. Russia’s service companies performed better than expected last month.
 

 
4. Vietnam’s economy outperformed other Asian countries last year.
 
Source: IMF   Read full article  
 
Standards of living are improving.
 
Source: IMF   Read full article  

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5. Next, we have some updates on Mexico.
 
The Markit PMI report continues to show persistent weakness in Mexico’s manufacturing.
 
Source: IHS Markit  
 
However, the IMEF indices have been more upbeat.
 

 
Remittances weakened in February but remain elevated.
 

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6. Some EM nations owe China quite a bit of money.
 
Source: @davidmihalyi, @WorldBank  
 
7. UAE, Bahrain, and Chile have strong vaccination programs (outpacing the US), but they rely heavily on Chinese vaccines. Is it possible that these vaccines are ineffective against COVID variants?
 
Source: @Noahpinion  


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Commodities

1. The decline in Chinese cyclical versus defensive stocks points to a top in commodity prices …
 
Source: BCA Research  
 
… and a declining¬†broad money impulse doesn’t help.
 
Source: BCA Research  

——————–

 
2. China increasingly relies on imported iron ore.
 
Source: Gavekal Research  
 
3. China’s steel rebar futures keep climbing.
 

 
4. In real terms, raw industrial prices remain in a long-term downtrend.
 
Source: BCA Research  
 
5. US lumber futures continue to rise.
 


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Energy

Crude oil sold off on Monday amid rising OPEC+ production.
 
Source: barchart.com  
 
Source: Reuters   Read full article  
 
Here is Iran’s oil output.
 


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Equities

1. The inverse correlation between tech stocks and bond yields remains intact. The relationship has been particularly strong with real rates. Here is the Nasdaq 100 correlation with TIPS prices.
 

 
As real rates stabilized, …
 

 
… the Nasdaq 100 rebounded.
 

——————–

 
2. Next, we have some sector performance charts.
 
Tech and semicondutors:
 

 

 
Communication Services:
 

 
Consumer Discretionary:
 

 
Healthcare:
 

 
Banks:
 

 
Energy:
 

 
Strong PMI indicators point to further outperformance for industrials.
 
Source: @ISABELNET_SA, @MorganStanley  

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3. On an equal-weighted basis, S&P 500 defensive stocks have significantly underperformed the broader market over the past decade.
 
Source: Stifel  
 
4. Capital expenditures have been a shrinking use of US corporate cash over the past 30 years.
 
Source: BofA Global Research  
 
Investors want companies to increase CapEx, according to a BofA survey.
 
Source: BofA Global Research  

——————–

 
5. Flows into cyclical ETFs continue to rise relative to defensive ETFs.
 
Source: SPDR Americas Research, @mattbartolini  
 
Equity ETF flows remain strong this year (in contrast to commodity ETFs).
 
Source: SPDR Americas Research, @mattbartolini  

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6. Equity positioning is approaching extreme levels.
 
Source: Deutsche Bank Research  
 
7. Analysts’ longer-term projections tend to overestimate corporate earnings.
 
Source: @ISABELNET_SA, @JPMorganAM  
 
8. “Artificial” share price gains become real for GameStop.
 
Source: Reuters   Read full article  


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Credit

1. US high-yield spreads hit a multi-year low.
 

 
2. The largest investment-grade ETF saw substantial outflows last week.
 
Source: @lisaabramowicz1  
 
3. The record number of US BB-rated high-yield downgrades appears to have peaked.
 
Source: CreditSights  
 
The majority of global corporate downgrades over the past year were in speculative-grade debt.
 
Source: Moody’s Investors Service  

——————–

 
4. Spreads tend to tighten significantly during the year before a downgrade.
 
Source: CreditSights  
 
5. Leveraged loan defaults have peaked.
 
Source: @lcdnews, @Kakourisr   Read full article  


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Global Developments

1. Here is a look at last month’s asset class returns in terms of z-scores (number of standard deviations).
 
Source: BCA Research  
 
2. The spike in money supply was a global phenomenon.
 
Source: Barclays Research  
 
3. Business surveys point to economic optimism.
 
Source: McKinsey Global Survey   Read full article  


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Food for Thought

1. Fading vaccine skepticism:
 
Source: @chartrdaily  
 
Source: Gallup   Read full article  

——————–

 
2. Data on coronavirus variants:
 
Source: @axios   Read full article  
 
3. Vaccine exports:
 
Source: Statista  
 
4. The number of drug therapies in research pipelines:
 
Source: OECD   Read full article  
 
5. US views on China:
 
Source: Gallup   Read full article  
 
6. Views on MLB’s decision to relocate the All-Star game:
 
Source: @MorningConsult, @AlexMSilverman   Read full article  
 
7. Top concerns by party affiliation:
 
Source: @EchelonInsights   Read full article  
 
8. E-commerce growth:
 
Source: McKinsey   Read full article  
 
Source: McKinsey & Company   Read full article  

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9. The time of the earliest winter sunset in each county in the US:
 
Source: r/dataisbeautiful  

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