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 SandlerÂ
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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