US miles driven are back to pre-pandemic levels

The Daily Shot: 20-Apr-21
The United States
Canada
The Eurozone
China
Emerging Markets
Cryptocurrency
Commodities
Energy
Equities
Rates
Global Developments
Food for Thought



 

The United States

1. According to Bank of America’s credit/debit card activity data, consumer spending paused after the stimulus-driven spike.
 
Source: BofA Global Research  
 
Hotel spending continues to recover, …
 
Source: BofA Global Research  
 
… as US miles driven return to pre-pandemic levels.
 
Source: Gavekal Research  

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2. This chart shows the total US monthly debt issuance.
 
Source: ANZ Research  
 
3. Estimates show that the federal debt-to-GDP ratio is now above one.
 
Source: Piper Sandler   
 
4. Here are some projections for the proposed infrastructure plan.
 
Spending vs. revenues:
 
Source: Moody’s Analytics  
 
The GDP impact (2 charts):
 
Source: Moody’s Analytics  
 
Source: Oxford Economics  

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5. Next, we have some updates on inflation.
 
Will the massive fiscal stimulus overheat the economy and accelerate inflation? The Fed is confident it will be able to keep price gains under control.
 
What happened in the late 1960s that resulted in high levels of inflation over the next decade?
 
Overheated labor market:
 
Source: Commerzbank Research  
 
Rapidly expanding money supply:
 
Source: Commerzbank Research  
 
The CPI:
 
Source: Commerzbank Research  
 
Companies are more concerned about wage pressures than commodity prices.
 
Source: BofA Global Research  
 
The San Francisco Fed expects inflation to remain below the 2% threshold over the next two years.
 
Source: San Francisco Fed   Read full article  

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6. Job postings on Indeed keep rising.
 
Source: @JedKolko, @indeed  
 
Small business employment continues to recover.
 
Source: Pantheon Macroeconomics  

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7. The US dollar is weakening again.
 


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Canada

1. Housing starts hit a record high last month.
 

 
2. Here is the projected budget deficit.
 
Source: The Washington Post   Read full article  
 
Will the debt-to-GDP ratio peak this year?
 
Source: Scotiabank Economics  

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3. Bond yields are climbing again.
 

 
4. Is the US dollar overvalued relative to the loonie?
 
Source: ING  


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The Eurozone

1. Euro-area bond yields are climbing again, with the French 10yr yield back in positive territory.
 

 
The US-Germany 10yr spread appears to have peaked.
 

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2. Construction output tumbled in February.
 

 
Source: Pantheon Macroeconomics  

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3. Vaccinations are picking up speed.
 
Source: @financialtimes   Read full article  
 
4. Germany’s Greens are polling well.
 
Source: Deutsche Bank Research  
 
5. Here is the evolution of euro banknotes in circulation by denomination.
 
Source: ECB   Read full article  


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China

1. The renminbi is climbing again vs. USD.
 

 
Is China’s currency massively overvalued?
 
Source: @markets   Read full article  

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2. Foreigners pulled back on government bond purchases last month.
 
Source: @WSJ   Read full article  
 
But equity flows appear to be picking up.
 
Source: @Lianting, @TheTerminal, Bloomberg Finance L.P.   Read full article  

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3. China’s retail investors lost interest in mutual funds.
 
Source: @markets   Read full article  


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Emerging Markets

1. India’s COVID situation continues to worsen.
 
Source: Reuters   Read full article  
 

 
As a whole, Asia’s infections are now driving increases in new cases globally.
 
Source: @axios   Read full article  

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2. Indonesia’s exports topped forecasts.
 

 
3. Brazil’s economic activity edged higher in February.
 

 
Here is Brazil’s manufacturing PMI vs. other economies.
 
Source: Mizuho Securities USA  

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4. Colombia’s economic activity remained depressed in February.
 

 
5. The 20-day average put/call ratio in the iShares MSCI Emerging Market ETF (EEM) is at the highest level since August 2020, which is typically a bullish signal (2 charts).
 
Source: Susquehanna Derivative Strategy  
 
Source: Susquehanna Derivative Strategy  


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Cryptocurrency

1. Cryptos remain under pressure (charts show Bitcoin, Ethereum, XRP).
 

 
2. Are cryptocurrency markets “gambling” or “investment”? Here is the language used by mass media over time.
 
Source: Arbor Research & Trading  
 
Is there a political angle to how cryptocurrencies are viewed?
 
Source: Arbor Research & Trading  


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Commodities

1. Iron ore is surging amid supply concerns.
 
Source: @markets   Read full article  
 

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2. China’s coal futures continue to rally.
 

 
3. Palladium is approaching last year’s highs due to tight supplies.
 
Source: @markets   Read full article  
 
4. US soybean futures hit the highest level since 2014.
 
Source: @WSJ   Read full article  
 


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Energy

1. The MVIS US Listed Oil Services Index (MVOIH) appears to be oversold.
 
Source: MarketDesk Research  
 
2. OPEC spare capacity is at historic highs. During the last commodity supercycle, spare capacity was around 2 million barrels per day (blue line).
 
Source: Oxford Economics  
 
3. Gasoline prices have exceeded 5-year highs in March.
 
Source: Fitch Solutions Macro Research  
 
A build-up of gasoline inventories could weigh on prices over the near-term.
 
Source: Fitch Solutions Macro Research  


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Equities

1. Market breadth has been strong in recent weeks.
 
Source: @WSJ   Read full article  
 
2. Smaller members of the S&P 500 have outperformed over the past six months.
 

 
Some lower-weight sectors (cyclicals) are expected to post the strongest earnings growth.
 
Source: BofA Global Research  

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3. The MSCI Quality Index has outperformed since mid-March.
 
Source: @WSJ   Read full article  
 

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4. The impulse from money growth is starting to fade, which could pressure global equities.
 
Source: Variant Perception  
 
5. The outperformance of developed market equities versus emerging markets looks stretched.
 
Source: MarketDesk Research  
 
6. Value stocks are expected to outperform (2 charts).
 
Source: BofA Global Research  
 
Source: Sean Markowicz, Schroders  

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7. The VIX futures curve has shifted down and returned to a more upward sloping shape, indicating less risk aversion among investors, according to Variant Perception.
 
Source: Variant Perception  
 
8. Insiders are selling again.
 
Source: @ISABELNET_SA  
 
9. Short interest in S&P 500 stocks remains near the lows.
 
Source: @jessefelder; @markets   Read full article  
 
10. Cigarette manufacturers took a hit on Monday.
 
Source: @WSJ   Read full article  
 


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Rates

1. Over the past two decades, episodes of rising yields have been interrupted by crises.
 
Source: Gavekal Research  
 
2. Treasury cash holdings are expected to bottom in late Q3, releasing massive amounts of liquidity.
 
Source: Morgan Stanley Research  


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Global Developments

1. Global daily COVID cases are hitting new highs.
 
Source: Oxford Economics  
 
2. Here is Bloomberg’s map of policy rate changes.
 
Source: Bloomberg   Read full article  
 
3. Incomes in 2020 were boosted by unprecedented government spending.
 
Source: NY Fed   Read full article  
 
Disposable income went into savings and away from consumption last year.
 
Source: NY Fed   Read full article  

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4. Here is a look at household debt as a share of GDP.
 
Source: Fitch Ratings  


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Food for Thought

1. Countries with the most women in national parliaments:
 
Source: Statista  
 
2. Asian American members of Congress:
 
Source: Axios   Read full article  
 
3. Companies using internal carbon pricing:
 
Source: McKinsey   Read full article  
 
4. Startups focused on climate change:
 
Source: PWC   Read full article  
 
5. US federal outlays on major healthcare programs:
 
Source: CBO  
 
6. Unused vaccine doses:
 
Source: @business   Read full article  
 
7. US drug overdose deaths:
 
Source: CDC  
 
8. Spending on NATO in Europe:
 
Source: Bloomberg   Read full article  
 
9. Military aircraft fleets:
 
Source: Statista  
 
10. The population of New York City:
 
Source: Capital Economics  

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