Posted on by The Daily Shot Editor: Lev Borodovsky

Boomer retirements jumped last year

The Daily Shot: 05-May-21
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Asia – Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Rates
• Global Developments
• Food for Thought

 

The United States

1. Let’s begin with some updates on the labor market.
 
• The jobs recovery has been lagging the economic rebound.
 
Source: @WSJ   Read full article  
 
• This scatterplot shows employment recovery vs. peak to trough loss by state.
 
Source: Fitch Ratings  
 
• Job market evaluations improved but are not back to pre-COVID levels.
 
Source: Gallup   Read full article  
 
• Job openings on Indeed keep climbing.
 
Source: @JedKolko, @indeed  
 
• Small business employment indicators point to substantial improvements.
 
Source: Paychex/IHS Markit Small Business Employment Watch  
 
• Air transport jobs are coming back.
 
Source: Mizuho Securities USA  
 
• A jump in Boomer retirements last year may exacerbate labor shortages in some sectors.
 
Source: Pew Research Center  
 
• This chart shows the ratio of corporate profits to employee compensation.
 
Source: Jack Ablin, Cresset Wealth Advisors  

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2. Next, let’s take a look at some trends in the housing market.
 
• Home price appreciation will moderate next year, according to CoreLogic.
 
Source: CoreLogic  
 
• Home prices decoupled from the CPI since 2000.
 
Source: @AdvPerspectives, @MI_Investments  
 
• New homes represent a growing proportion of housing inventory in the market.
 
Source: @markets   Read full article  
 
• Residential fixed investment has accelerated (see chart) but is still below the housing peak (reached in 2006).
 
Source: @WSJ   Read full article  
 
• Banks have been easing lending standards on mortgages, especially nonconforming loans (chart shows the net percent of lenders tightening standards).
 
Source: Federal Reserve Board  
 
• Tight inventories are highly correlated with faster home price appreciation, …
 
Source: Calculated Risk   Read full article  
 
… and smaller differences between list and selling prices.
 
Source: CoreLogic  

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3. The trade deficit hit a record high amid robust import demand.
 

 
4. The Evercore ISI trucking index hit the highest level in over two decades.
 
Source: Evercore ISI  

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Canada

1. Residential construction is booming.
 

 
2. The trade balance unexpectedly swung into deficit in March.
 

 
3. The labor market is set to reclaim the pre-pandemic peak well ahead of the US.
 
Source: Alpine Macro  
 
Businesses expect to increase employment as the economy rebounds.
 
Source: Alpine Macro  

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4. Alpine Macro expects USD/CAD to drop another 10%.
 
Source: Alpine Macro  

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The United Kingdom

1. UK factories are increasingly facing backlogs.
 

 
Rapidly rising output prices point to a higher PPI ahead.
 
Source: Pantheon Macroeconomics  

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2. Mortgage approvals were lower than expected in March.
 

 
But the RICS buyer inquiries data point to a rebound.
 
Source: Pantheon Macroeconomics  

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The Eurozone

1. Let’s begin with Germany.
 
• Negative deposit rates:
 
Source: The Deutsche Bundesbank; @Schuldensuehner  
 
• Dependence on foreign trade:
 
Source: BCA Research  
 
• Aging capital stock (equipment, structures, etc.):
 
Source: BCA Research  
 
• Dependency ratios:
 
Source: BCA Research  
 
• Households’ equity holdings:
 
Source: @WSJ   Read full article  
 
• Election outcome odds in the betting markets:
 
Source: @PredictIt  

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2. Spain is facing another COVID wave.
 
Source: RaboResearch  
 
3. The ECB’s net securities purchases have accelerated (as promised).
 
Source: Pantheon Macroeconomics  
 
4. Here is a look at the euro-area money markets.
 
Source: ECB   Read full article  
 
5. Improvements in sentiment point to stronger economic growth ahead.
 
Source: @macro_daily  

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Europe

1. Let’s start with some data on government debt/deficit.
 
Source: @WSJ   Read full article  
 
Source: Eurostat   Read full article  

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2. How much slack is there in the EU’s labor market?
 
Source: Eurostat   Read full article  
 
3. Next, we have a couple of charts on the vaccine situation.
 
• Vaccine brands:
 
Source: Statista  
 
• Concerns about vaccine passport data privacy:
 
Source: Morning Consult  

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4. Finally, we have a couple of updates on the Czech Republic.
 
• Budget deficit:
 

 
• GDP growth:
 

Back to Index

 

Asia – Pacific

1. Japan’s shares trade at a discount to global peers.
 
Source: Gavekal Research  
 
2. Taiwan’s benchmark index held support at the 50-day moving average.
 
Source: barchart.com  
 
3. Singapore’s business activity growth is moderating.
 
Source: IHS Markit  
 
4. New Zealand’s Q1 employment report was stronger than expected.
 
• Employment gains:
 

 
• The unemployment rate:
 

 
Bond yields climbed in response.
 

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5. Next, we have some updates on Australia.
 
• The RBA remains dovish despite robust economic growth. The central bank is focused on the labor market recovery (similar to the Fed).
 
Source: MarketWatch   Read full article  
 
• Service-sector activity is surging.
 
Source: IHS Markit  
 
• Residential construction is booming. March saw slower gains in house permits (2nd chart), but apartment construction strengthened.
 

 
• This chart shows the percentage of Australia’s households by dwelling status.
 
Source: UBS Asset Management  

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China

1. China remains dependent on coal.
 
Source: Gavekal Research  
 
But coal’s share of primary energy use is gradually declining.
 
Source: Gavekal Research  

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2. Hong Kong’s business sector is finally in growth mode (barely).
 
Source: IHS Markit  
 
Retail sales remain soft.
 

Back to Index

 

Emerging Markets

1. The RBI took measures to cushion the COVID crisis impact.
 
Source: @business   Read full article  
 
Bond yields tumbled.
 

 
India’s unemployment worsened last month.
 
Source: @IlyaSpivak, @business   Read full article  

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2. Vietnam’s economy is rebounding (2 charts).
 
Source: ANZ Research  
 
Source: IHS Markit  

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3. The rise in oil production bodes well for Russian stock earnings.
 
Source: Alpine Macro  
 
4. Turkey’s manufacturing output shifted into contraction mode last month (PMI < 50).
 
Source: IHS Markit  
 
5. The market is betting that Naftali Bennett is the next Prime Minister of Israel.
 
Source: @PredictIt  
 
Source: Jpost   Read full article  

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6. Next, let’s take a look at vehicle sales in Latin America.
 
• Mexico:
 

 
• Chile:
 

 
• Brazil:
 

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7. EM factory rebound is lagging growth in advanced economies.
 
Source: Fidelity Investments  
 
8. EM equity sector dominance appears to be shifting.
 
Source: @ISABELNET_SA, @BofAML  

Back to Index

 

Cryptocurrency

1. Ether’s open interest has risen sharply to record highs above $5 billion.
 
Source: Skew   Read full article  
 
2. Meanwhile, open interest in bitcoin’s options market has been trending lower in recent weeks.
 
Source: Skew   Read full article  
 
3. Bitcoin’s transaction speed is slowing while costs are rising (2 charts).
 
Source: BCA Research  
 
Source: BCA Research  

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4. Most G10 central banks have outlined their digital currency plans.
 
Source: BCA Research  
 
5. Dogecoin hit a record high.
 
Source: FTX  

Back to Index

 

Commodities

1. Bloomberg’s commodity index is at multi-year highs.
 

 
US flows into broad-based commodities and agriculture ETFs increased over the past week while investors positioned away from energy and precious metals.
 
Source: ANZ Research  

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2. US corn futures continue to surge, …
 

 
… as grain prices boost farmland values.
 
Source: Purdue University/CME Group Ag Economy Barometer  
 
US farmers’ sentiment remains elevated.
 
Source: Purdue University/CME Group Ag Economy Barometer  

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3. There has been a weak relationship between gold and US CPI over the past 50 years.
 
Source: World Gold Council  

Back to Index

 

Energy

1. WTI futures are above $65/bbl.
 
Source: @markets   Read full article  
 
2. Here is a look at oil production collapses.
 
Source: @SergiLanauIIF  

Back to Index

 

Equities

1. Let’s start with the seasonal path for the S&P 500 since 1928.
 
Source: Deutsche Bank Research  
 
2. Net equity issuance in advanced economies is back in positive territory.
 
Source: Bernstein, @markets   Read full article  
 
3. Here is a look at stock market performance globally over the past month.
 
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital  
 
4. Margin improvements have been driving EPS growth this year.
 
Source: J.P. Morgan Asset Management  
 
5. Positive earnings surprises are at record highs.
 
h/t @LizAnnSonders  
 
But the market hasn’t been rewarding positive surprises lately.
 
Source: BofA Global Research  

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6. Earnings estimates are tightly correlated to the ISM Manufacturing PMI.
 
Source: Cornerstone Macro  
 
7. ETF assets growth continues to outperform mutual funds. The trend is likely to continue after the looming capital gains tax hike because ETFs give investors more control over realizations than mutual funds.
 
Source: @wealth   Read full article  
 
8. Next, we have some equity factor performance trends (year-to-date).
 
• Value vs. growth:
 

 
• Momentum:
 

 
• High-dividend shares:
 

Back to Index

 

Rates

1. Oxford Economics revised its Treasury borrowing projections lower due to stronger-than-expected tax collections.
 
Source: Oxford Economics  
 
Source: @WSJ   Read full article  
 
Oxford Economics expects the Treasury will hit the debt limit in early September and burn through its remaining cash.
 
Source: Oxford Economics  

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2. Japanese Treasury bond-buying tends to pick up after April.
 
Source: Variant Perception  
 
3. Swaption trading soared last quarter amid rising Treasury yields.
 
Source: IFR   Read full article  

Back to Index

 

Global Developments

1. Here is a look at central banks’ balance sheet expansion since the start of the pandemic.
 
Source: IMF   Read full article  
 
Source: @Scutty  

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2. Consumer confidence has rebounded.
 
Source: @financialtimes   Read full article  
 
3. Next, we have the rentership rates in select economies.
 
Source: Brookings   Read full article  
Source: Statista  

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Back to Index

 

Food for Thought

1. US population pyramid projections:
 
Source: The Census Bureau  
 
2. US life expectancy:
 
Source: The Economist   Read full article  
 
3. Migration within the US:
 
Source: Placer Labs   Read full article  
 
4. Gen-Z vs. Gen Alpha:
 
Source: Morning Consult   Read full article  
 
5. US government payments to households as a percent of personal income:
 

 
6. US vaccination trends:
 
Source: Bloomberg   Read full article  
 
Source: Civiqs   Read full article  

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7. Civilian conflict deaths:
 
Source: Statista  
 
8. Cocaine production by country:
 
Source: @adam_tooze, @gideon_long   Read full article  
 
9. The happiness index:
 
Source: @business   Read full article  
 
10. The number of babies named Alexa:
 
Source: Statista  

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