The Daily Shot: 07-Feb-23
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. Let’s start with some additional data on the labor market.
• This chart shows the total nonfarm payrolls without seasonal adjustments.
• Payroll figures surprised to the upside for ten months in a row.
Source: @bespokeinvest, h/t @dailychartbook
• Low snowfall in January boosted the payrolls figure.
Source: Pantheon Macroeconomics
• Excess retirements persist.
Source: Deutsche Bank Research
• Employment in some sectors hasn’t yet recovered from COVID-related losses.
Source: Oxford Economics
Here is an example.
• Below are some trends in wage growth.
– Wage growth of nonsupervisory employees:
Source: @WSJ Read full article
– Wage growth by industry:
Source: Oxford Economics
– Weekly earnings (boosted by more hours):
Source: Oxford Economics
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2. Next, we have some updates on inflation.
• Gains in labor costs will keep services inflation elevated (2 charts).
Source: Wells Fargo Securities
Source: MRB Partners
• Instantaneous inflation, which puts more weight on recent observations, is back near 2%.
Source: Jan Eeckhout/UPF Barcelona Read full article
• Inflation has peaked, similar to past cycles.
Source: TS Lombard
• Here is the ISM Services PMI price index vs. the CPI.
Source: Oxford Economics
• Below is the PCE inflation forecast from Nomura.
Source: Nomura Securities
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3. Rental vacancies are grinding higher, …
Source: Apartment List
… as apartment market tightness eases.
Source: Calculated Risk
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4. The GDP impact of tightening financial conditions (which peaked in mid-2022) should ease this year.
Source: Goldman Sachs
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Canada
1. The Ivey PMI rebounded last month, signaling an improvement in business activity.
2. Canada’s housing prices outperformed most other markets.
Source: Capital Economics
• Here is a forecast for Canada’s housing affordability index from Oxford Economics.
Source: Oxford Economics
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The United Kingdom
1. Construction activity moved deeper into contraction territory last month, …
… driven by weakness in the housing market.
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2. Car sales improved relative to last year, boosted by EVs.
Source: The Guardian Read full article
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The Eurozone
1. The Sentix indicator of investor confidence continues to rebound.
Source: RTT News Read full article
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2. Retail sales took a hit in December.
3. Germany’s factory orders jumped in January.
But industrial production surprised to the downside.
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4. Euro-area financial stocks are improving in absolute and relative terms.
Source: MRB Partners
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Europe
1. The Swedish krona has been under pressure (chart shows EUR gaining against SEK).
Source: @LibbyCherry98, @markets Read full article
• The Norway krone’s decline has been sharp, …
… dragged lower by the yield differential with the euro.
Source: Nordea Markets
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2. Below is an illustration of member-state contributions to the EU economy.
Source: Visual Capitalist Read full article
3. This chart shows the median length of European governments.
Source: Pew Research Center Read full article
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Japan
1. The 10-year JGB is testing the BoJ’s 50 bps cap again.
The BoJ has been forced to buy massive amounts of debt to maintain the cap on yields.
Source: Barclays Research
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2. Nominal wages surged in December.
Source: @erica_yokoyama, @economics Read full article
Real earnings growth moved back into positive territory.
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Emerging Markets
1. The Philippine CPI continues to surge, topping forecasts.
2. Brazil’s trade surplus is expected to weaken.
Source: Macrobond
3. EM equities underperformed in recent days in dollar terms.
4. EM government bond issuance surged last month.
Source: @WSJ Read full article
5. This chart shows EM rate hike cycles relative to the Fed.
Source: Wells Fargo Securities
6. Will inflation be back to central banks’ targets by Q3?
Source: Oxford Economics
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Cryptocurrency
1. Bitcoin’s price rally stalled around $24K resistance.
Source: Glassnode Read full article
2. The average bitcoin holder is experiencing unrealized profits, driven by the recent price rally.
Source: Glassnode Read full article
3. Crypto investment products had a fourth consecutive week of inflows.
Source: CoinShares Read full article
Long-bitcoin funds accounted for most inflows last week, while multi-asset funds continued to see outflows.
Source: CoinShares Read full article
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Commodities
• Funds continue to boost their bets on copper …
… and gold.
• Bets against wheat futures are hitting extreme levels.
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Energy
1. Longview Economics isn’t buying the optimistic forecasts for oil demand from OPEC and IEA.
Source: Longview Economics
2. China’s oil intake has recovered somewhat over the last two months, but remains below previous highs.
Source: Alpine Macro
3. The copper price has sharply diverged from the Brent oil price.
Source: Alpine Macro
4. EU natural gas in storage remain well above the 10-year average.
Source: @JKempEnergy
5. US retail electricity prices surged last year.
Source: @hedgeye, h/t @dailychartbook
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Equities
1. Technicians see strong resistance at 4,200 for the S&P 500.
Source: Barron’s Read full article
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2. The Deutsche Bank Consolidated Positioning index is approaching neutral territory.
Source: Deutsche Bank Research
3. Goldman expects flat earnings and no price changes this year for the S&P 500.
Source: Goldman Sachs
4. Q4 earnings growth is negative on a year-over-year and quarter-over-quarter basis.
Source: Deutsche Bank Research
Earnings growth is still negative when excluding banks’ loan loss provisions and energy.
Source: Deutsche Bank Research
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5. Companies with significant exposure to the US government have widened their underperformnce.
Here is how they perform around debt-limit deadlines.
Source: Goldman Sachs
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6. The equal-weight S&P 500 index underperformed in recent days.
How does the equal-weight index differ from the cap-weighted one in terms of sector exposure?
Source: S&P Dow Jones Indices
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7. The tech mega-cap bounce from the lows has been impressive.
Source: @bespokeinvest Read full article
8. Profits typically peak before wages.
Source: PGM Global
9. Next, we have the year-to-date US equity fund flows by fund group.
Source: EPFR
10. SPAC IPO activity collapsed at the end of last year. But SPAC M&A deal volume increased.
Source: S&P Global Market Intelligence
11. Stocks remain inversely correlated to the US dollar.
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Credit
1. US high-yield spreads have tightened significantly in recent months.
Source: @lisaabramowicz1
2. Banks are widening spreads and tightening underwriting standards for business loans.
Source: @NickTimiraos
3. US loan loss provisions have been rising.
Source: TS Lombard
4. MBS spreads have tightened as bond market volatility eased.
Source: Oxford Economics
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Rates
1. At 4.6%, fed funds have been a popular instrument.
Source: @WSJ Read full article
2. Foreign demand for Treasuries strenghened in December.
Source: Deutsche Bank Research
3. SOFR derivatives volume surged on CME last month.
Source: CME; @BrianGierke
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Global Developments
1. Asset managers have been boosting their bets against the US dollar.
Source: Deutsche Bank Research
2. Here is the Economist’s Big Mac index. Negative numbers indicate that a currency is undervalued relative to USD (in %).
Read full article
3. Policy rates are still below current levels of inflation in countries where deviations in headline inflation from targets are large.
Source: Codera Analytics
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Food for Thought
1. Broadway show attendance and movie theater visits:
Source: Torsten Slok, Apollo
2. Dating app usage:
Source: @OpenAxisHQ
3. COVID-era US construction spending trends:
Source: @WSJ Read full article
4. Inflation by income decile:
Source: @WSJ Read full article
5. Monthly car payments:
Source: @WSJ Read full article
6. The Chinese spy balloon’s path across North America:
Source: Statista
7. US defense pacts:
Source: u/earththejerry
8. Reasons people use Twitter:
Source: @OpenAxisHQ
9. Biggest movies of 2022 globally (by revenue):
Source: @Datawrapper, @elliot_bentley
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