Posted on by The Daily Shot Editor: Lev Borodovsky

Americans are quitting their jobs at a record pace

The Daily Shot: 13-Oct-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. The NFIB small business sentiment index ticked lower in September.
 

 
• Labor shortages became even more acute last month.
 

 
Source: MarketWatch   Read full article  
 
• A record share of businesses are boosting wages and plan to keep doing so in the months ahead. The cost of labor is becoming more of a problem.
 

 
Source: @benbreitholtz  
 
By the way, households also expect to see higher wages, according to the NY Fed’s national consumer survey.
 

 
• The percentage of firms planning to raise prices keeps climbing.
 

 
• Business outlook continues to deteriorate.
 

 
And it’s not about poor sales.
 

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2. US job openings came off the highs in August as the pandemic strengthened.
 

 

 
• But demand for workers in logistics (transportation & warehousing) continues to surge.
 

 
• The hires-to-openings ratio remains at record lows.
 

 
Here is the Beveridge curve.
 
Source: @GregDaco  
 
• Americans are quitting their jobs at a record pace. The quits rate and the absolute number of voluntary resignations hit a record high.
 

 
Here is the quits-to-hires ratio – an indication of a tightening labor market.
 

 
Separately, the NY Fed’s national survey shows that fewer Americans are worried about losing their job.
 

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3. Tight labor markets and indications of higher wage inflation further boosted expectations for the pace of Fed rate hikes. The market now sees a 70%+ probability of two hikes next year.
 

 
4. Next, we have some updates on inflation.
 
• Households’ inflation expectations continue to climb.
 

 
• Market professionals have been boosting their inflation expectations as well, according to a survey from Deutsche Bank (2 charts).
 
Source: Deutsche Bank Research  
 
Source: Deutsche Bank Research  
 
• Based on wholesale prices, used-car CPI will climb in the months ahead.
 
Source: Nordea Markets  
 
• Here is Nomura’s core CPI estimate for September (the used car price spike will come later).
 
Source: Nomura Securities  
 
• There is plenty of talk about stagflation these days.
 
Source: @DavidInglesTV  

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5. Morning Consult’s high-frequency consumer confidence indicator keeps trending lower.
 
Source: Morning Consult  

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Canada

1. Consumer confidence continues to moderate.
 

 
2. Canada’s labor market recovery has been outpacing the US.
 
Source: @WSJ   Read full article  
 
3. The market is now certain that the BoC will hike rates on or before April.
 

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The United Kingdom

1. The labor market continues to recover.
 
• The number of people on unemployment:
 

 
• Weekly hours:
 

 
• Private sector wages were above the public sector for the first time since 2008.
 
Source: @samueltombs  

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2. Business investment in the UK has been lagging.
 
Source: Barclays Research  

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The Eurozone

1. Germany’s ZEW economic expectations indicator deteriorated further this month.
 

 
Source: Reuters   Read full article  
 
• German wholesale inflation has been accelerating.
 

 
• Bund yields are climbing.
 

 
And market professionals expect further gains ahead.
 
Source: Deutsche Bank Research  

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2. French industrial sentiment has been moderating.
 

 
3. Italian business investment has been outpacing European peers.
 
Source: @financialtimes   Read full article  
 
4. The Citi Economic Surprise Index keeps drifting lower.
 

 
5. The Eurozone’s economy is more exposed to higher energy prices than the US.
 
Source: Gavekal Research  
 
6. This chart compares the current euro-area recovery to previous downturns.
 
Source: MRB Partners  

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Europe

1. Sweden’s unemployment rate hit the lowest level in years (for this time of the year).
 

 
2. The Norwegian krone has been strengthening as oil prices surge.
 

 
3. Poland’s bond yields are soaring.
 

 
4. This chart shows EU employment by sector over the past two decades.
 
Source: Eurostat   Read full article  

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Asia – Pacific

1. Japan’s vaccination rate has been outpacing the US.
 
Source: BIS   Read full article  
 
2. Singapore’s number of seriously ill COVID patients has been climbing.
 
Source: Barclays Research  

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China

1. Thermal coal prices continue to surge.
 

 
Metallurgical coal is also hitting new highs.
 

 
Weak domestic production and the loss of imports from Australia have contributed to low coal inventories. The Delta spike also reduced imports from Mongolia.
 
Source: Alpine Macro  

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2. The trade surplus hit a new high for this time of the year (YTD).
 

 
Exports are at record highs.
 

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3. The property sector has been decelerating for some time.
 
Source: Natixis  
 
The credit situation remains precarious.
 
• Evergrande’s bond price:
 

 
• The HY index yield (approaching 20%):
 

 
• As we mentioned previously, the blowout in bond spreads could boost equity volatility.
 

Back to Index

 

Emerging Markets

1. Let’s begin with India.
 
• Inflation has been moderating.
 

 
• Industrial production is back above 2019 levels.
 

 
• Electricity prices surged recently.
 
Source: @BloombergQuint   Read full article  

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2. Turkey’s industrial production continues to rise.
 

 
3. South Africa’s manufacturing output rebounded in August.
 

 
4. Romania’s inflation surprised to the upside.
 

 
Separately, COVID cases in Romania have accelerated.
 
Source: Longview Economics  

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5. Mexico’s manufacturing output surprised to the upside.
 

 
Formal job creation remains strong.
 

 
6. The Colombian peso has been outperforming as oil prices surge (vs. USD).
 

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7. How correlated are EM currencies to the renminbi?
 
Source: TS Lombard  

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Cryptocurrency

1. Bitcoin held short-term resistance.
 

 
2. Bitcoin’s transfer volume as a percentage of its realized market cap is rising, which typically marks the beginning of a bullish phase, according to blockchain data.
 
Source: Glassnode   Read full article  
 
3. Bitcoin mining profitability accelerated during the first few days of October.
 
Source: Arcane Research   Read full article  
 
4. Jamie Dimon says bitcoin is worthless
 
Source: Reuters   Read full article  
 
And the IMF warned of significant risk regarding the adoption of crypto as legal tender. 
 
Source: CoinDesk   Read full article  

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Commodities

1. Coffee prices are hitting multi-year highs.
 

 
Source: Reuters   Read full article  

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2. Global copper production has not reacted strongly to the recent price surge.
 
Source: Variant Perception  

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Energy

1. The gap between oil prices and the global rig count has blown out.
 
Source: Alpine Macro  
 
2. $100/bbl or $60/bbl?
 
Source: Deutsche Bank Research  
 
3. Coal mining stocks have been lagging coal prices.
 
Source: Alpine Macro  
 
4. The uranium mining ETF spiked 13% on Tuesday.
 

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Equities

1. Market professionals see an additional 5-10% decline in the S&P 500 before the year-end (according to a Deutsche Bank survey).
 
Source: Deutsche Bank Research  
 
Where will the market be in three and twelve months?
 
Source: Deutsche Bank Research  

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2. US earnings beats have probably peaked.
 
Source: Scotiabank Economics  
 
3. Over the past week, volume in inverse ETFs accounted for 1.75% of total NYSE volume – a record high.
 
Source: SentimenTrader  
 
4. There are a lot of unprofitable growth stocks.
 
Source: @jessefelder   Read full article  
 
5. Equity returns over the next decade could fall far short of expectations.
 
Source: BCA Research  
 
6. The recent underperformance of small caps appears to have bottomed.
 
Source: Truist Advisory Services  
 
7. Semiconductor stocks are at the 200-day moving average.
 
Source: @markets   Read full article  
 
8. Which sectors will outperform over the next 12 months?
 
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital  
 
9. The differential between stock and bond ETF flows has compressed but remains above the median. 
 
Source: SPDR Americas Research, @mattbartolini  

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Rates

1. The longer end of the Treasury curve has been flattening.
 

 
2. The next 20bps move on the 10yr yield will be higher.
 
Source: Deutsche Bank Research  
 
Where will yields be in three months? Twelve months?
 
Source: Deutsche Bank Research  

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Global Developments

1. 2020 saw the 8th straight year of outperformance by the industrial property sector, marking it the longest run of outperformance by any real estate sector since records began. 
 
Source: UBS Asset Management  
 
2. Manufacturing PMIs have weakened as the dollar strengthened.
 
Source: Mizuho Securities USA  
 
3. Covid has led to a massive increase in public debt in the developed world. 
 
Source: Desjardins  
 
4. Recovery growth rates in 2021 are very uneven around the world. 
 
Source: IIF  
 
5. Finally, here is the share of government debt held by central banks.
 
Source: BIS   Read full article  

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Food for Thought

1. Binge drinking and marijuana use at US colleges:
 
Source: Michael Cembalest; J.P. Morgan Asset Management  
 
2. The number of hours of physical exercise per week (globally):
 
Source: Ipsos  
 
3. Views on getting a booster shot among those who are fully vaccinated:
 
Source: Ipsos   Read full article  
 
4. Americans’ plans for retirement:
 
Source: @SamRo, @OxfordEconomics   Read full article  
 
5. Telework by income group in 2020:
 
Source: Institute for Policy Studies   Read full article  
 
• Telework by educational attainment:
 
Source: Mortgage Bankers Association  

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6. Why workers haven’t unionized:
 
Source: @AmerCompass  
 
7. Working multiple remote jobs:
 
Source: @CivicScience   Read full article  
 
8. Education spending as a share of GDP:
 
Source: Statista  
 
9. Earth’s atmosphere in perspective:
 
Source: Visual Capitalist   Read full article  

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