The Daily Shot: 03-May-21
• The United States
• The Eurozone
• Asia – Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Rates
• Food for Thought
The United States
1. Household incomes surged in March, driven by government checks.
Source: ING
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2. Spending increased sharply, …
… and is now above pre-COVID levels.
Source: Mizuho Securities USA
Below is a forecast for the whole year from Oxford Economics.
Source: Oxford Economics
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3. Saving has been extremely high.
Source: @WSJ Read full article
Here is a comparison to 2008.
Source: Mizuho Securities USA
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4. Next, we have some updates on wage growth.
• The employment cost index increased by most since 2007 in the first quarter.
• Wages are now above pre-COVID levels.
Source: Mizuho Securities USA
• Sustained gains in wage costs could boost inflation.
Source: @markets Read full article
• Wages in low-skill occupations are rebounding from the pandemic-related slump.
Source: Variant Perception
• Despite tight labor markets in recent years, wage inflation has remained subdued. Is it different this time?
Source: Pantheon Macroeconomics
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5. The PCE inflation report was roughly in line with expectations. The year-over-year figures are distorted to the upside by base effects.
Does the declining loan-to-deposit ratio point to softer inflation ahead?
Source: TS Lombard
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6. The updated April U. Michigan consumer sentiment index was even stronger than the prior report.
7. The Chicago PMI index hit a multi-decade high, pointing to remarkable strength in the manufacturing sector.
Here is a comparison to the ISM PMI at the national level.
Source: Pantheon Macroeconomics
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The Eurozone
1. The euro area registered a double-dip recession in the first quarter, …
Source: BBC Read full article
… lagging the US.
Source: @adam_tooze, @financialtimes Read full article
Here are the GDP trends by country.
• Germany (below consensus):
But economists expect robust growth for the rest of the year.
Source: Deutsche Bank Research
• France (above consensus; improved domestic demand):
Source: Pantheon Macroeconomics
• Italy (not as severe as expected):
• Spain:
• Portugal (much worse than expected):
Here is a summary, …
Source: Nordea Markets
… and a forecast.
Source: Commerzbank Research
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2. The euro-area CPI was in line with expectations, …
… with the headline inflation increase driven by energy.
Source: Nordea Markets
Here are the contributions to the core CPI.
Source: Nordea Markets
Both French and Italian inflation reports were a bit above consensus.
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3. French consumer spending unexpectedly declined in March.
4. The euro-area unemployment rate was below forecasts.
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5. The S&P Eurozone sovereign bond index yield is now positive.
Source: S&P Global Market Intelligence
6. This chart shows the euro-area shadow rate.
Source: Morgan Stanley Research
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Asia – Pacific
1. Japan’s consumer confidence declined less than expected amid a spike in COVID cases.
2. South Korea’s trade surplus unexpectedly collapsed, driven by higher imports.
The won slumped in response.
South Korea’s manufacturing growth remains robust.
Source: IHS Markit
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3. Taiwan’s GDP growth surprised to the upside.
Factory activity accelerated further in April.
Source: IHS Markit
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4. Australia’s job ads continue to climb, hitting the highest level in over a decade.
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China
1. The mutual fund industry has been booming.
Source: Gavekal Research
But returns have been linked to concentrated portfolios.
Source: Gavekal Research
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2. Container shipping rates continue to surge.
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Emerging Markets
1. Let’s run through the April PMI charts for EM Asia.
• Indonesia (accelerating):
Source: IHS Markit
• The Philippines (contracting again):
Source: IHS Markit
• Malaysia (accelerating):
Source: IHS Markit
• India (still growing):
Source: IHS Markit
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2. India’s COVID cases exceeded 400,000 per day.
3. Thai exports surged in March.
4. Mexico’s GDP recovery will take time.
Credit growth has slowed.
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Cryptocurrency
1. Bitcoin is above the 50-day moving average.
2. Ethereum broke above $3k.
Here is the Etherium/Bitcoin ratio.
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3. Bitcoin fund flows have been soft.
Source: JP Morgan, @themarketear
4. Tether’s market cap surged this year as crypto trading activity accelerated.
Source: @markets Read full article
5. Taking Dogecoin to the moon …
Source: Decrypt Read full article
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Commodities
1. The CME lumber futures surged past $1,500.
Source: @markets Read full article
Source: CNBC Read full article
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2. US corn and soybeans continue to rally.
The drying waterways in South America are contributing to soaring grain prices.
Source: @markets Read full article
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3. Here is the percentage of commodity markets that are up 50% or more over the past year.
Source: @sentimentrader
And this is the weighted-average backwardation.
Source: @markets Read full article
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Equities
1. Let’s begin with the year-to-date return attribution for the S&P 500 …
… and the S&P 600 (small caps).
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2. How frequently did 95% of S&P 500 stocks close above their 200-day moving average?
Source: @markets Read full article
3. What percentage of stocks are overbought (RSI > 70)? (See definition of EAFE.)
Source: Matthew Bartolini
4. M&A activity has been heating up in recent months.
Source: The Daily Feather
5. Next, we have some sector performance charts (for last week).
• Tech and semiconductors:
• Telecoms:
Source: Reuters Read full article
• Metals & Mining:
• Consumer staples:
• Healthcare:
• Utilities:
• REITs:
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6. Now, let’s take a look at some thematic portfolios.
• Clean energy:
• ARK Innovation:
• Cannabis:
• The thematic ETF universe:
Source: Matrix Private Capital Group
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7. Bulk shipping stocks have been on fire, …
… as dry-bulk shipping costs surge.
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8. We are entering a more uncertain period of the year for stocks.
Source: LPL Research
But “sell in May …” could result in underperformance.
Source: S&P Global Market Intelligence
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Rates
1. Here is the attribution of Treasury yield changes.
• April:
• Year-to-date:
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2. Below is Goldman’s projection for net Treasury supply.
Source: Goldman Sachs; h/t J B
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Food for Thought
1. Jamaica’s tourism arrivals (year-over-year):
2. China’s vaccine usage:
Source: AP Read full article
3. Oxygen demand:
Source: Statista
4. US Jobless claims resulting in payments:
Source: Pantheon Macroeconomics
5. Working from home:
Source: Deutsche Bank Research
6. Highest-valued startups:
Source: Statista
7. The world’s longest walkable road:
Source: Brilliant Maps Read full article
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