Posted on by The Daily Shot Editor: Lev Borodovsky

US population growth hit a record low

The Daily Shot: 09-Apr-21
• The United States
• The United Kingdom
• The Eurozone
• Europe
• Asia – Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought

 

The United States

1. Americans are saving/investing more of their stimulus cash.
 
Source: @axios   Read full article  
 
Nonetheless, Bank of America is predicting an 11% jump in retail sales for March.
 
Source: BofA Global Research, @LONGCONVEXITY  
 
And here is a forecast for personal incomes from Morgan Stanley.
 
Source: Morgan Stanley Research  

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2. Initial unemployment claims continue to drift lower and are now below one million per week.
 
Source: Oxford Economics  
 
The following two charts show US unemployment insurance withdrawals over time.
 
Source: Morgan Stanley Research  

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3. High-frequency indicators continue to show rapid improvement.
 
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital  
 
Consumer confidence is recovering.
 

 
But new infections are rising again.
 
Source: Gavekal Research  

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4. Returning to the topic of wage inflation (here), will we see a shift in power toward labor?
 
Source: BofA Global Research  
 
Increased collective bargaining could boost wage growth substantially.
 
Source: EPI   Read full article  

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5. US population growth hit a record low.
 
Source: Oxford Economics  
 
6. Office leases are rebounding, driven by bargain rates.
 
Source: @WSJ   Read full article  
 
Source: @WSJGraphics   Read full article  

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7. Will the massive US twin deficit put downward pressure on the dollar?
 
Source: BCA Research  

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The United Kingdom

1. Construction activity surged last month.
 

 
2. The nation’s labor market is recovering quickly.
 
Source: Evercore ISI  
 
3. Is the vaccine euphoria over? The pound softened vs. the euro.
 

 
4. Here is the prime minister’s approval rating.
 
Source: Morning Consult  

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The Eurozone

1. Let’s begin with Germany.
 
• Factory orders strengthened in February.
 

 
But the industrial production report was terrible – well below consensus.
 

 
• Construction activity remains soft.
 

 
• Have US yields reached a temporary equilibrium relative to German yields?
 
Source: BCA Research  
 
• Vaccinations are gaining momentum.
 
Source: @OliverRakau  

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2. Construction activity at the Eurozone level has stabilized.
 
Source: IHS Markit  
 
3. Eurozone’s producer price gains are accelerating. A similar PPI pattern appears throughout the world (see the China section).
 

 
4. Over the past 11 years, consumption has accounted for a lower share of GDP while capital expenditures and exports have risen.
 
Source: BCA Research  
 
5. Euro-area financial conditions are the most accommodative in years.
 

 
6. How willing is the population to get vaccinated?
 
Source: ING  
 
7. This chart shows Mario Draghi’s approval rating.
 
Source: Morning Consult  

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Europe

1. Let’s begin with Sweden.
 
• Business output improved in February, but services continue to lag.
 

 
Industrial orders remain robust.
 

 
• Household consumption is rebounding.
 

 
• Here is the GDP forecast from Nordea Markets.
 
Source: Nordea Markets  
 
• Was avoiding strict lockdowns worth it for Sweden?
 
– Deaths:
 
Source: @johnauthers   Read full article  
 
– GDP growth:
 
Source: @johnauthers   Read full article  

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2. Czech retail sales were stronger than expected in February.
 

 
But construction output remained soft.
 

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3. Swiss F/X reserves continue to climb (now well above the annual economic output).
 

 
4. This chart shows home prices vs. rents in the EU.
 
Source: Eurostat   Read full article  
 
5. Here are the share prices of Deutsche Bank vs. Credit Suisse.
 

 
6. EU’s vaccine supply will increase dramatically this quarter.
 
Source: ING  

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Asia – Pacific

1. Japan’s consumer confidence is recovering.
 

 
Here is the Economy Watchers Survey Expectations index.
 

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2. Taiwan’s wholesale prices are surging (once again, it’s a global trend).
 

 
3. Here is Moon Jae-in’s approval rating.
 
Source: Morning Consult  
 
4. Australia’s service sector activity is surging.
 

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China

1. China’s CPI is back in positive territory.
 

 

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2. A bigger story, however, is China’s PPI, which surprised to the upside.
 

 
The above chart looks similar in many economies around the world, driven primarily by energy.
 
Source: @Ole_S_Hansen  

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3. China’s tech firms have given up their outperformance vs. the Nasdaq 100 (in dollar terms).
 

 
4. Bond inflows paused in March.
 
Source: Gavekal Research  
 
5. Will Hong Kong’s bond yields rise further to align more with the US?
 
Source: DBS  

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Emerging Markets

1. Brazil’s COVID-related deaths hit a record high.
 

 
Brazilian stocks have underperformed substantially since the start of 2020 (in dollar terms). Will the gap narrow going forward?
 

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2. Mexico’s CPI is climbing.
 

 
3. The Chilean peso is making another run at the 700 level.
 
Source: barchart.com  
 
4. South Africa’s February industrial production was below expectations.
 

 
5. The Indian rupee continues to slump.
 

 
5. EM fund flows have turned negative.
 
Source: @WSJ   Read full article  

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Cryptocurrency

1. XRP has significantly outperformed large cryptocurrencies over the past month.
 
Source: FinViz  
 

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2. Cryptocurrencies tend to rise by an average of 91% within 5-days from being listed on Coinbase, more so than other crypto exchanges.
 
Source: Messari   Read full article  
 
Coinbase’s growth has been impressive.
 
Source: Visual Capitalist   Read full article  

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3. The cost of hedging against a bitcoin crash using options is collapsing.
 
Source: @skewdotcom  
 
4. The average price of NFTs is falling after peaking at around $4,000 in mid-February.
 
Source: Nonfungible.com  

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Commodities

1. US corn futures are surging.
 
Source: @WSJ   Read full article  
 

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2. Chicago lumber futures continue to hit record highs.
 

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Equities

1. Sentiment is increasingly bullish as bears capitulate.
 

 
2. The S&P 500 forward price-to-sales ratio hit another post-dot-com high.
 

 
3. Valuations are extreme for the Russell 2000 companies that are profitable.
 
Source: @jessefelder   Read full article  
 
4. S&P 500 valuations imply low to negative returns over the next 1-5 years (2 charts).
 
Source: JP Morgan Asset Management  
 
Source: JP Morgan Asset Management  

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5. Here is the breakdown of US equity issuance.
 
Source: @ISABELNET_SA, @GoldmanSachs  
 
6. Global equity fund inflows over the past five months have been spectacular.
 
Source: @DiMartinoBooth, @BankofAmerica  
 
Inflows to sustainable ETPs are on track to outpace the previous two years.
 
Source: BlackRock  

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7. Investors rotated out of healthcare and consumer staples stocks last month.
 
Source: SPDR Americas Research, @mattbartolini  
 
8. This chart shows equity risk/return profile by sector.
 
Source: Mizuho Securities USA  
 
9. VIX is below 17.
 

 
The S&P 500 call skew is the highest in years.
 
Source: Chris Murphy, Susquehanna Derivative Strategy  

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10. Finally, here is the M&A activity by sector.
 
Source: Dealogic, @themarketear  

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Credit

1. AAA CLO paper is in demand once more as Nochu returns. The CLO market is chasing leverage loan allocations again. Just don’t upset your leveraged finance banker.
 
Source: Bloomberg   Read full article  
 
2. This chart shows BBB bond leverage distribution.
 
Source: CreditSights  

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Rates

1. Here is the one-week change in the Treasury curve.
 

 
2. Should investors be concerned about taper-tantrum 2.0?
 
Source: @ISABELNET_SA, @MorganStanley  
 
3. The US Treasury cash balances at the Fed continue to drop as stimulus checks go out.
 

 
As a result, bank reserves hit a record high (the market is flooded with liquidity).
 

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Global Developments

1. Below are the year-to-date returns by asset class.
 
Source: Mizuho Securities USA  
 
2. Global zombie firms (held up by government programs) will be a drag on productivity.
 
Source: @ISABELNET_SA, @BofAML  
 
3. High excess deaths point to underreporting of COVID cases.
 
Source: Longview Economics  

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Food for Thought

1. What would it take to join the 1%?
 
Source: Statista  
 
2. Reasons for saving money:
 
Source: MagnifyMoney   Read full article  
 
3. Americans prioritizing economic growth compared to the unemployment rate:
 
Source: Gallup   Read full article  
 
4. Splurging after the pandemic:
 
Source: The Balance   Read full article  
 
5. Ramadan Mubarak. Ramadan 2021 fasting hours:
 
Source: Al Jazeera   Read full article  
 
6. Concerns about US stimulus:
 
Source: Echelon Insights  
 
7. US incarcerations:
 
Source: Vera Institute of Justice   Read full article  
 
8. Economies with fewer than five new COVID cases per million people over the past month:
 
Source: Oxford Economics  
 
9. Top 200 shot locations in the NBA:
 
Source: @kirkgoldsberry  

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Have a great weekend!

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