The Daily Shot: 19-Apr-21
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Asia – Pacific
• China
• Emerging Markets
• Cryptocurrencies
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. US residential construction activity surged last month, rebounding from the February slump.
• Housing starts (total and single-family):
• Building permits:
• Housing starts relative to the post-2008 recovery:
Source: Mizuho Securities USA
• Housing starts have diverged from the NAHB homebuilder confidence index.
Source: Piper Sandler
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2. The U. Michigan consumer sentiment index was below market forecasts, with the expectations component stalling this month.
Near-term inflation expectations surged.
House buying conditions deteriorated further. Will we see this trend reflected in the housing market?
Source: @TCosterg
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3. Mortgage forbearance should ease as the labor market strengthens.
Source: Federal Reserve Read full article
4. Freight activity grew further last month, with freight spending hitting a record high.
Source: Cass Information Systems
• Freight rates inflation is now the highest in nearly a decade.
Source: Cass Information Systems
• The US faces a severe shortage of drivers, which is exacerbating the supply-chain bottlenecks.
Source: Cass Information Systems
5. The nation’s labor shortages are not limited to drivers.
Source: @jessefelder; Business Insider Read full article
6. The Evercore ISI business survey shows tightening inventories.
Source: Evercore ISI
7. BofA’s survey of fund managers shows rising expectations of above-trend growth and inflation.
Source: @ISABELNET_SA, @BofAML
8. The regional manufacturing surveys point to exceptionally strong factory activity this month.
• The NY Fed’s manufacturing indicator:
• The Philly Fed’s manufacturing indicator:
• Manufacturing employment expectations surged, which will further tighten the labor market in the months ahead (2 charts).
• Supply-chain hurdles remain.
• The backlog of orders continues to climb (2 charts).
• Price pressures persist.
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9. According to a widely tracked indicator from Goldman, US financial conditions are now the most accommodative in decades. The stock market’s strength, extraordinarily tight credit spreads, low rates, and a weak US dollar contributed to this trend.
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Canada
1. Existing home sales remain robust.
2. Canada experienced one of the largest gains in real housing prices over the past 30 years.
Source: Scotiabank Economics
3. Expectations for higher house prices have been relatively weak compared to actual price changes.
Source: Scotiabank Economics
4. Restaurant reservations have declined relative to pre-pandemic levels and have sharply diverged from the US.
Source: Market Ethos, Richardson GMP
5. Manufacturing sales weakened in February.
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The United Kingdom
1. Home price appreciation is rebounding this month.
2. Finance job postings are up this year but still lag historical levels.
Source: @BloombergQuint Read full article
Many financial firms have shifted a portion of their business to the EU.
Source: @business Read full article
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The Eurozone
1. Passenger car registrations strengthened last month.
Source: Pantheon Macroeconomics
This chart shows vehicle registrations at the EU level.
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2. Last month’s trade surplus was below expectations.
3. French manufacturing and services price expectations have diverged sharply.
Source: Pantheon Macroeconomics
Separately, here are the first-round voting intentions in France.
Source: @financialtimes Read full article
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4. Will we see a pullback in the Eurozone manufacturing PMI?
Source: Pantheon Macroeconomics
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Asia – Pacific
1. Japan’s exports topped expectations.
2. Singapore’s exports remain solid.
3. The Taiwan dollar is strengthening amid US pressure.
Source: @WSJ Read full article
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4. New Zealand’s factory activity surged last month.
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China
1. Is the stock market underperformance coming to an end?
2. Consumer confidence is rebounding.
Source: Morning Consult
3. This chart shows China’s excavator sales.
Source: Gustavo Fuhr
4. Will we see a slowdown in housing finance?
Source: Gavekal Research
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Emerging Markets
1. Let’s begin with Colombia.
• Business confidence:
• Industrial production:
• Retail sales:
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2. Nigeria’s inflation is surging, driven by food prices.
3. Russia’s industrial production improved last month.
Producer prices rose faster than expected.
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4. China’s and Russia’s investment-grade quasi-sovereign bonds have lagged the broader compression in EM spreads over the past 6-months.
Source: Damian Sassower
5. India’s exports strengthened in March.
6. Vietnam stands to benefit from strong US growth.
Source: Bloomberg Read full article
7. Here is the correlation between EM Asia stocks and the US dollar.
Source: @DavidInglesTV
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Cryptocurrencies
1. The weekend’s crypto selloff wiped out all of bitcoin’s gains over the past month …
Source: FinViz
… and triggered mass liquidation (the chart shows changes in open interest).
Source: @skewdotcom
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2. Despite short-term swings, BTC/USD remains in a long-term uptrend going back to 2014.
Source: Dantes Outlook
3. Dogecoin is now above 30 cents.
Source: FTX
Source: Benzinga Read full article
Source: Cointelegraph.com Read full article
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4. Coinbase’s transaction volume gains have been impressive.
Source: The Economist Read full article
5. Here is the online search activity for cryptos.
Source: Arbor Research & Trading
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Commodities
1. Iron ore futures in Singapore hit a multi-year high.
2. Dry bulk shipping costs are moving higher.
3. Aluminum prices have been rising.
4. CTAs have been reducing their gold positions.
Source: Deutsche Bank Research
Separately, here is the largest gold miners ETF.
Source: Pain Report; Bloomberg
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5. Oxford Economics does not expect a commodity supercycle.
Source: Oxford Economics
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Energy
1. The US rig count keeps climbing (2 charts).
Source: Joel Fingerman, Fundamental Analytics
The frac spread continues to rebound.
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2. Global oil stockpiles are normalizing.
Source: @markets Read full article
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Equities
1. Equity positioning is at extreme levels, …
Source: Deutsche Bank Research
… driven by discretionary accounts.
Source: Deutsche Bank Research
What will happen when the US economic growth starts moderating?
Source: Deutsche Bank Research
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2. What are fund managers’ key concerns?
Source: BofA Global Research
3. The amount of equity capital raised this year has been impressive.
Source: @Not_Jim_Cramer
But SPAC fundraising is slowing.
Source: @WSJ Read full article
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4. Small caps have underperformed over the past month after reaching extreme overbought levels.
Source: BCA Research
5. The implied volatility of VIX (VVIX) has been ticking higher relative to VIX (demand for VIX options).
Source: Susquehanna Derivative Strategy
Historically, peaks in VVIX/VIX have led to higher equity market volatility.
Source: Susquehanna Derivative Strategy
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6. Here is more evidence of speculative activity in the US equity market.
Source: @jessefelder; CNBC Read full article
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Credit
1. The spread between US CCC and B-rated corporate debt is approaching multi-year lows.
Source: Oxford Economics
2. European HY spreads continue to tighten.
3. Leveraged loan fund flows remain robust.
Source: @lcdnews Read full article
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Global Developments
1. Let’s start with pandemic-driven stimulus levels in major economies.
Source: BofA Global Research
2. The IMF posted a large upward revision to its 2021 US GDP forecast while slashing those for the euro-area and UK (2 charts).
Source: III Capital Management
Source: BlackRock
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3. There is a divergence between the G3 consensus GDP growth estimates and the output PMI.
Source: @themarketear
4. This chart shows the expected GDP changes relative to the pandemic-period levels.
Source: @ISABELNET_SA, @BofAML
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Food for Thought
1. Support for workers’ rights to collectively bargain:
Source: Morning Consult Read full article
2. What consumers sell online:
Source: MagnifyMoney Read full article
Reasons some are reluctant to sell online:
Source: MagnifyMoney Read full article
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3. The compact disc:
Source: Statista
4. US debt service costs:
Source: Bloomberg Read full article
5. Changes in the number of homeowners:
Source: @FactTank Read full article
6. The COVID situation in Israel:
Source: @carlquintanilla, @fundstrat
7. Vaccine production and exports:
Source: @axios Read full article
8. AI-related jobs:
Source: OECD Read full article
AI Ph.D. employment:
Source: @indexingai
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9. North American tree cover:
Source: @JakubMarian
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