Posted on by The Daily Shot Editor: Lev Borodovsky

The US faces a severe shortage of drivers

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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