The Daily Shot: 10-Aug-22
• The United States
• Europe
• Japan
• Asia – Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Global Developments
• Food for Thought
The United States
1. The NFIB small business sentiment index edged higher in July.
• But businesses are reporting deteriorating earnings.
And sales expectations look recessionary.
• CapEx expectations continue to move lower.
• Hiring remains a challenge.
• Companies have been boosting wages but are now becoming more conservative with their compensation plans.
Source: Wells Fargo Securities
• Fewer firms are raising (or expect to be raising) prices, …
… which points to slower consumer price gains ahead.
Source: Piper Sandler
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2. Unit labor costs are surging, …
… which could signal faster inflation.
Source: Capital Economics
• Labor productivity tumbled this year. Some economists suspect that these productivity figures will be revised higher.
Source: MarketWatch Read full article
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3. US consumers have shifted spending from goods to experiences.
Source: @WSJ Read full article
4. Related to the trend above, packaging supplies are surging as shipping demand slows.
Source: Richard Bourke, Ryan Fox, BI
5. Except for the highest income bracket, households’ credit card spending is still below pre-COVID levels.
Source: BofA Global Research
6. More than half of student loan borrowers made no progress in paying down their student debt since 2019.
Source: Federal Reserve Bank of New York Read full article
7. The Oxford Economics Supply Chain Stress Index eased modestly last month.
Source: Oxford Economics
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Europe
1. The ECB’s rate trajectory is expected to outpace the Fed next year.
Source: Vanda Research
2. This scatterplot shows natural gas storage vs. storage capacity in the EU.
Source: Gavekal Research
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Japan
1. Machine tool orders are slowing.
2. Producer price gains eased as subsidies cap energy prices.
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Asia – Pacific
1. Taiwan’s stocks could come under further pressure as semiconductor demand slumps.
Source: Alpine Macro
2. Australia’s capacity utilization hit a record high.
Source: @ANZ_Research
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China
1. The CPI increase was softer than expected, …
… with gains driven by food prices.
The core inflation continues to moderate.
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2. The PPI also surprised to the downside.
What’s going on with the ferrous metals sector (2nd chart above)? Here is the answer.
Source: BCA Research
We know that building construction has been depressed. Machinery demand is also under pressure.
Source: BCA Research
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3. Earnings have dropped considerably, on par with some of the worst profit contractions in history.
Source: Alpine Macro
• Multinationals took a hit in China this year.
Source: Gavekal Research
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4. Stock prices are tumbling in Hong Kong.
The property developer stock index hit the lowest level since early 2016.
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Emerging Markets
1. Hungarian inflation is surging.
Source: ING
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2. The Turkish lira continues to trade near 18 to the dollar.
Source: barchart.com
3. Mexican inflation keeps climbing.
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Cryptocurrency
1. Ether continues to outperform, but it hit resistance (2nd chart).
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2. NFT trading volumes have slowed.
Source: The Block
3. Despite the selloff, crypto remains popular.
Source: Statista
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Commodities
US feeder cattle futures rallied in recent weeks.
Source: Reuters Read full article
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Energy
1. Crude oil backwardation has been easing.
2. Here is the attribution of the expected US retail gasoline price decline next year.
Source: @EIAgov, h/t @pav_chartbook
3. US wood-pellet exports have been rising quickly.
Source: @WSJ Read full article
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Equities
1. BofA’s clients jumped into tech last week.
Source: BofA Global Research
2. Semiconductor shares took a hit as demand wanes.
Source: IBD Read full article
Semiconductor inventories have been rebounding.
Source: Morgan Stanley Research
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3. Will the S&P 500 hit resistance at the 18x P/E multiple?
Source: Truist Advisory Services
4. The recent rebound has been fueled by short-covering.
Source: Goldman Sachs; @MikeZaccardi
5. Many “tactical” ETFs have a fairly strong correlation to the standard 60% equity/40% bond portfolio.
Source: FactorResearch Read full article
6. Only 18% of large-cap managers beat their benchmark over the past 12 months.
Source: BofA Global Research
7. US stocks don’t look very attractive relative to corporate bonds.
8. Dividend yields vary significantly across key emerging and developed markets.
Source: MRB Partners
• Dividends are attractive relative to bonds in many markets (not the US).
Source: MRB Partners
• Dividends have played an important role in the total return of equities. Global dividend yields, however, are still below the long-term norm, consistent with historically low bond yields.
Source: MRB Partners
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Global Developments
1. Here is a look at unemployment rates in the largest advanced economies.
Source: @WSJ Read full article
2. The current monetary tightening cycle is the broadest in history.
Source: TS Lombard
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Food for Thought
1. Condo prices in NYC and Tokyo (in USD terms):
Source: Alpine Macro
2. Credit card solicitations:
Source: @WSJ Read full article
3. Mortgage originations by age:
Source: Federal Reserve Bank of New York
4. Spending on groceries vs. dining out:
Source: @financialtimes Read full article
5. How households plan to maintain spending over the next 6 months:
Source: Morgan Stanley Research
6. Union vs. non-union pay in the US:
Source: Bloomberg Law Read full article
7. Congressional districts with the highest planned and operating renewables capacity:
Source: Bloomberg Read full article
8. Seasonality of time spent at work in select economies:
Source: @sundellviz
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