The Daily Shot: 27-Mar-23
• The United States
• The United Kingdom
• The Eurozone
• Europe
• Asia – Pacific
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Global Developments
The United States
1. Durable goods orders, excluding transportation, were flat last month. But capital goods orders edged higher (2nd panel).
• Survey indicators point to weakness ahead for capital goods orders (falling business investment).
Source: Pantheon Macroeconomics
• Orders for automobiles declined.
Source: MarketWatch Read full article
• Real capital goods orders were lower again.
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2. The PMI report from S&P Global points to a slower contraction in the US manufacturing sector.
Service firms reported faster growth this month.
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3. Truck tonnage has been rebounding.
Source: American Trucking Associations; h/t @dailychartbook
4. Office vacancy rates are near record highs.
Source: Longview Economics
As an example, San Francisco bridge crossings remain below pre-pandemic levels.
Source: Longview Economics
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5. US banks have tightened lending standards in autos and credit cards this quarter, which will weigh on consumers’ ability to spend.
Source: Capital Economics
6. The market is increasingly unsure about another Fed rate hike in May, …
… and is pricing in almost 80 bps of rate cuts later this year.
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7. Concerns over a US government (“technical”) default this summer remain elevated.
Source: Reuters Read full article
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The United Kingdom
1. Manufacturing activity unexpectedly slowed this month, …
… but orders have stabilized.
• Service firms continue to report growth.
• Price pressures have been easing.
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2. Last month’s real retail sales topped expectations.
3. The pound underperformed last week.
4. UK food producers are trying to prevent shortages.
Source: @financialtimes Read full article
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The Eurozone
1. Factories reported further contraction this month.
– France:
– Germany:
• But service companies showed accelerating growth.
– France:
– Germany:
• Price pressures continue to ease, which should pull inflation lower (2nd chart).
Source: Pantheon Macroeconomics
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2. This chart shows protests against pension reforms in France.
Source: Statista
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Europe
1. More hikes ahead for Norway’s central bank?
Source: ING
2. Have Sweden’s real wages peaked for now?
Source: Riksbank Read full article
3. Goldman sees further credit tightening ahead for Europe.
Source: Goldman Sachs
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Asia – Pacific
1. Hedge funds are boosting their bets against the yen.
2. Singapore’s industrial production is down sharply on a year-over-year basis.
3. Taiwan’s unemployment rate hit a multi-year low.
Source: Focus Taiwan Read full article
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Emerging Markets
1. Brazil’s inflation remains stubbornly high.
2. Mexico’s economic activity jumped in January, topping expectations.
Source: @JPSpinetto, @economics Read full article
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3. Now let’s take a look at some performance data from last week.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Chicago hog futures bounced from the lows on Friday, with weakness driven by demand concerns.
2. Here is last week’s performance across key commodity markets.
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Energy
1. US natural gas futures remain under pressure amid robust production and elevated inventories.
2. US LNG exports will pick up in 2024 and 2025 with capacity additions.
Source: Capital Economics
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Equities
1. Where do analysts see the S&P 500 over the next 12 months? Right now, the target is about 16% above the current level.
Source: @FactSet Read full article
Here are the return targets by sector.
Source: @FactSet Read full article
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2. Corporate insiders have been buying financial stocks over the past two weeks.
Source: SentimenTrader
• This chart shows bank failures and drawdowns in banks’ share prices.
Source: Capital Economics
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3. Spending on share buybacks slowed last quarter.
Source: Goldman Sachs
4. Next, we have some performance data from last week.
• Sectors:
– Sectors year-to-date:
Source: Yardeni Research
• Equity factors:
• Macro basket pairs:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. Deutsche Bank’s stock and bonds came under pressure last week, as hedge funds look for the next weak link in the financial sector.
• Stock price:
• CDS spread:
• CoCo price:
But unlike CS, Deutsche Bank is profitable and is not bleeding assets.
Source: @gmorpurgo, @lauralevfinance, @markets Read full article
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2. Swiss authorities borrowed dollars from the Fed as they work through the UBS/CS merger.
Source: @LibbyCherry98, @greg_ritchie, @markets Read full article
3. Next, let’s take a look at some trends in US small banks.
• Borrowing surged after the SVB collapse.
• Small banks have been selling high-yielding jumbo CDs to compensate for deposit losses.
• Small banks have been dominating commercial construction and development lending.
• As of the 15th, the overall rotation in deposits from small to large banks was not dramatic.
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4. Deposits in the banking system as a whole declined over the week ending on the 15th.
Business loans jumped as companies tapped revolving facilities.
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5. US banks have tightened lending standards for commercial real estate loans.
Source: Longview Economics
• Exposure to office properties sent CMBX BBB price sharply lower.
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6. Finally, we have last week’s performance by asset class.
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Global Developments
1. This chart shows housing market declines in advanced economies.
Source: Goldman Sachs
2. Finally, we have last week’s performance data for advanced economies.
• Currency indices:
• Bond yields:
• Large-cap equities:
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Food for Thought
1. Quit rates (voluntary resignations) in select states:
Source: @WSJ Read full article
2. Ocean plastic waste pollution by country:
Source: Visual Capitalist Read full article
3. The greatest threat to US public health:
Source: @axios Read full article
4. US and Russian nuclear arsenals:
Source: Statista
5. The number of people who left Russia in 2022, by destination:
Source: @financialtimes Read full article
6. Most-sanctioned countries:
Source: Statista
7. The countries never visited by a sitting US president:
Source: Statista
8. Population of rich vs. poor countries:
Source: @portereduardo, @opinion Read full article
9. Most NBA finals appearances:
Source: OpenAxis
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