Key trends contributing to labor shortages

The Daily Shot: 22-Jun-21
The United States
Canada
The United Kingdom
Europe
Asia – Pacific
China
Emerging Markets
Cryptocurrency
Commodities
Energy
Equities
Credit
Rates
Global Developments
Food for Thought



 

The United States

1. Let’s begin with housing.
 
Half of the recent homebuyers made a downpayment of at least 20%.
 
Source: @WSJ   Read full article  
 
The biggest housing price gains were in suburban communities, according to an Evercore ISI survey.
 
Source: Evercore ISI  
 
Home flipping hasn’t been popular since the start of the pandemic.
 
Source: @markets   Read full article  
 
The US is increasingly facing housing shortages.
 
Source: @WSJ   Read full article  
 
Source: Rosen Consulting Group  

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2. Next, we have some updates on the labor market.
 
Pay has been rising the fastest in low-wage sectors.
 
Source: @WSJ   Read full article  
 
These are some of the trends that contributed to labor shortages.
 
Childcare challenges:
 
Source: BCA Research  
 
Accelerated retirements:
 
Source: BCA Research  
 
Source: BCA Research  
 
This chart shows “excess” retirements vs. the pre-COVID trend.
 
Source: Goldman Sachs; @carlquintanilla  
 
Depressed immigration:
 
Source: BCA Research  

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3. Now, let’s take a look at a few trends in consumer spending.
 
Card spending has been above pre-COVID levels.
 
Source: JP Morgan; @carlquintanilla  
 
Retailers now wield more pricing power than they have in years.
 
Source: Evercore ISI  
 
Spending has been shifting to services.
 
Source: BCA Research  
 
Spending patterns are not back to “normal.”
 
Source: @financialtimes   Read full article  

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4. Finally, we have some updates on the pandemic.
 
New COVID cases continue to trend lower.
 
Source: Scotiabank Economics  
 
But the Delta variant, which is more contagious, is becoming a concern.
 
Source: Pantheon Macroeconomics  
 
Some states now see an increase in hospitalizations of young people.
 
Source: @bpolitics   Read full article  


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Canada

1. Speculative net-long position in the Canadian dollar appears stretched.
 
Source: Longview Economics  
 
2. Home price appreciation is nearing extreme levels.
 


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The United Kingdom

1. Let’s start with market-based BoE rate trajectory expectations.
 
Source: ING  
 
2. Card spending points to some rotation to services.
 
Source: ING  
 
3. Retail sales patterns have not returned to pre-COVID levels.
 
Source: ING  
 
4. UK households boosted their savings more than peers in other economies.
 
Source: @markets   Read full article  
 
5. The England vs. Scotland football rivalry has existed for a century and a half.
 
Source: @ftdata   Read full article  


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Europe

1. Dutch home price gains are accelerating.
 

 
2. Germany’s sovereign debt issuance spiked since the start of the pandemic.
 
Source: Pantheon Macroeconomics  
 
3. This chart shows the distribution of debt by sector in the EU.
 
Source: Eurostat   Read full article  
 
4. Finally, we have the EU’s trade surplus with the US by sector.
 
Source: @financialtimes   Read full article  


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Asia – Pacific

1. South Korea’s and the Eurozone’s producer prices are highly correlated. Several other manufacturing hubs also follow a similar pattern.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
2. Japan’s exports are now well above pre-COVID levels.
 

 
3. Taiwan’s export orders remain robust.
 


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China

1. The Shanghai Shenzhen CSI 300 Index is holding support at the 200-day moving average.
 

 
2. High-yield debt spread to global peers has been widening.
 
Source: @WSJ   Read full article  
 
3. US investors continue to increase their exposure to China.
 
Source: Gavekal Research  
 
4. Households and businesses are in no rush to spend.
 
Source: BCA Research  
 
5. According to an Evercore ISI survey, international companies’ sales in China are starting to moderate.
 
Source: Evercore ISI  


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Emerging Markets

1. New COVID cases in India continue to fall.
 
Source: Scotiabank Economics  
 
2. The Russian ruble has been lagging oil prices.
 
Source: @RichardDias_CFA  
 
3. Capital Economics expects EM price pressures to ease in the coming months.
 
Source: Capital Economics  
 
4. EM retail sales volumes are back above pre-crisis levels, led by emerging Asia (2 charts).
 
Source: Capital Economics  
 
Source: Capital Economics  

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5. Next, we have some updates on Iran.
 
Lagging economic growth:
 
Source: @financialtimes   Read full article  
 
Weakened currency:
 
Source: @financialtimes   Read full article  
 
Inflation:
 
Source: @financialtimes   Read full article  
 
Government debt:
 
Source: @financialtimes   Read full article  


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Cryptocurrency

1. Bitcoin formed a death cross, although, in the fast-moving crypto world, this is old news.
 

 
2. Bitcoin implied volatility has been trending lower since the spike in late May.
 
Source: @technology   Read full article  
 
3. Crypto options volume spiked this year.
 
Source: @technology   Read full article  
 
4. How much does Tether deviate from par?
 
Source: FTSE Russell and Digital Asset Research  
 
5. Which banks offer crypto services?
 
Source: @markets   Read full article  
 
6. What are the main reasons investors buy crypto?
 
Source: @financialtimes   Read full article  
 
7. Sotheby’s will accept bitcoin or ether in a high-profile auction.
 
Source: Reuters   Read full article  


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Commodities

1. China’s weakened money supply growth points to slower gains in industrial commodities.
 
Source: Pantheon Macroeconomics  
 
2. Commodities held up well during the 2013 taper tantrum.
 
Source: Gavekal Research  
 
3. How much have commodities declined from their 2021 peaks?
 
Source: Deutsche Bank Research  
 
4. US livestock prices have rolled over.
 


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Energy

1. Brent is above $75/bbl.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
2. The Brent curve backwardation is nearing multi-year highs.
 

 
3. The US rig count and frac spread count continue to recover.
 

 
4. This map shows the pipeline infrastructure for Russia’s natural gas.
 
Source: @simongerman600, @NatGeo   Read full article  
 
6. Finally, we have US renewables consumption by source and sector.
 
Source: @EIAgov   Read full article  


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Equities

1. The rebound in longer-term yields on Monday …
 

 
… reignited the reflation trade, with the “buy the dip” crowd jumping in (3 charts).
 

 

 

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2. Some inflation-friendly sectors saw outflows last week.
 
Source: Arbor Research & Trading  
 
3. Equity positioning is hovering near the top of the historical range for the past two months.
 
Source: Deutsche Bank Research  
 
Discretionary investor positioning appears to have peaked while systematic strategy positioning keeps climbing.
 
Source: Deutsche Bank Research  

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4. Tech’s relative earnings momentum peaked in late May of 2020.
 
Source: Truist Advisory Services  
 
5. This chart shows the potential earnings per share impact from a 15% global minimum tax rate. Much of the hit is already priced in.
 
Source: III Capital Management  
 
6. The year-over-year global earnings rebound has peaked.
 
Source: @ISABELNET_SA, @BofAML  
 
7. Share buyback announcements hit a record this year.
 
Source: @ISABELNET_SA, @GoldmanSachs  
 
8. Forget margin debt. Retail investors are taking out personal loans to trade stocks. This is not going to end well.
 
Source: MagnifyMoney   Read full article  


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Credit

1. US high-yield spreads are near record lows.
 

 
2. 20% of high yield bonds are getting called this year (refinanced).
 
Source: @AlexWittenberg_   Read full article  
 
3. There has been a rise in sustainable financing in the global high-yield market over the past few years.
 
Source: Deutsche Bank Research  
 
4. US banks are well-capitalized. The Fed should have no concerns about the banking system as it starts to tighten.
 
Source: Scotiabank Economics  


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Rates

1. Bank deposits have been outpacing loans due to QE.
 
Source: Piper Sandler¬†  
 
2. We are past “Peak Fed” for this cycle.
 
Source: Morgan Stanley Research; @carlquintanilla  
 
3. Treasuries are now less attractive for Japanese investors than they were earlier this year.
 
Source: TS Lombard  
 
4. How many rate hikes are priced in over the next four years?
 
Source: JP Morgan; @Scutty  
 
5. The Treasury yield curve tends to flatten when the Fed tapers.
 
Source: Nordea Markets  
 
6. The US 10-year breakeven rate held resistance.
 
Source: Evercore ISI  
 
7. Here is how the Fed’s policy “tweak” (#3 here) affected different money market rates.
 
Source: JP Morgan; A K  
 
8. The Fed’s Kaplan is concerned about rapidly rising residential property prices.
 
Source: CNBC   Read full article  


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Global Developments

1. Hedge funds increased their bets against the dollar last week – right before the Fed-induced rally.
 

 
Here is the positioning in key currency futures.
 
Source: Morgan Stanley Research  
 
The Citi PAIN index shows active F/X traders are most bearish on the US dollar in years.
 

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2. FX implied volatility has trended lower as the size of the Fed and ECB’s balance sheet rises.
 
Source: Morgan Stanley Research  
 
3. Google searches for ESG have risen substantially over the past year.
 
Source: Deutsche Bank Research  
 
4. This chart shows the CPI in advanced economies using a two-year period to avoid base effects.
 
Source: Capital Economics  
 
5. Advanced economies’ central banks are still quite dovish.
 
Source: Oxford Economics  


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Food for Thought

1. Amazon Prime Day’s most popular categories:
 
Source: @CivicScience  
 
2. AMC Entertainment’s cash holdings:
 
Source: @WSJ   Read full article  
 
3. Pandemic hobbies:
 
Source: @chartrdaily  
 
4. Business automation trends:
 
Source: Bain & Company   Read full article  
 
5. Changes in the global smartphone market:
 
Source: @financialtimes   Read full article  
 
6. Revenues of the largest oil and gas companies:
 
Source: Statista  
 
7. Sources of retirement income in the US:
 
Source: Gallup   Read full article  
 
8. Age at first marriage:
 
Source: @TheBigDataStats  
 
9. US birth rate:
 
Source: @business   Read full article  
 
Birth rates in select economies:
 
Source: Bloomberg   Read full article  

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10. The median age around the world:
 
Source: @331167, @DiMartinoBooth  
 
11. Vaccination policies
 
Source: Ballotpedia   Read full article  
 
12. The year each disease was identified and a vaccination licensed:
 
Source: @EricTopol, @NatureHumBehav, @OurWorldInData   Read full article  
 
13. China’s CO2 emissions:
 
Source: @business   Read full article  
 
Source: BBC   Read full article  

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14. Americans’ views in 1946 on Winston Churchill’s proposal for continued military collaboration between the US and Britain:
 
Source: Gallup   Read full article  

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