The Daily Shot: 16-May-23
• The United States
• Canada
• The Eurozone
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. The NY Fed’s Empire Manufacturing Index, the first regional factory report of the month, was disappointing.
• The drop from April was substantial.
Source: MarketWatch Read full article
• The index of new orders tumbled back into negative territory.
But expectations for new orders improved.
• Fewer companies plan to raise prices.
• The report showed a sharp decline in CapEx plans, which has become a national trend.
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2. With supply chain pressures easing amid softer demand, …
… freight costs continue to moderate.
Source: Cass Information Systems
The Cass Truckload Linehaul Index measures per-mile costs of dry van truckload transportation.
Source: Cass Information Systems
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3. Fewer companies are mentioning inflation on earnings calls.
Source: @FactSet Read full article
4. Consumer credit delinquency rates are climbing, rising above pre-COVID levels for some cohorts.
Source: Federal Reserve Bank of New York
• Federal student loan payments will be due at the end of August or sooner. The payment moratorium party is about to end.
Source: Federal Reserve Bank of New York
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5. The Atlanta Fed’s wage growth tracker declined sharply in April.
6. Lower tax receipts have increased the chances of an early-June X-date.
Source: @WSJ Read full article
There isn’t much time left.
Source: CNBC Read full article
Source: Fox News Read full article
For now, investors expect a resolution by the X-date.
Source: BofA Global Research
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Canada
1. Existing home sales surged last month.
• The sales-to-listings ratio continues to signal price stabilization (2 charts).
Source: Capital Economics
Source: Scotiabank Economics
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2. Boosted by multi-family construction, housing starts topped expectations, …
… but single-family activity remains depressed.
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3. Canadian banks have tightened mortgage lending standards significantly.
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital
4. The number of companies filing for bankruptcy continues to rise.
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital
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The Eurozone
1. Euro-area industrial production declined sharply in March, …
… as factory output tumbled.
Source: RTTNews Read full article
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2. Germany’s wholesale inflation is now in negative territory.
3. Economists continue to upgrade estimates for Spain’s 2023 GDP growth.
4. Enterprise loan demand declined sharply as credit conditions tightened.
Source: Variant Perception
5. Tighter credit (chart below) and shrinking liquidity (2nd chart) are a headwind for stocks.
Source: BCA Research
Source: BCA Research
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Europe
1. Sweden’s inflation has finally peaked.
Source: @nicrolander, @economics Read full article
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2. Norway’s GDP edged higher in Q1.
3. Denmark’s growth slowed, but the economy is holding up well.
4. Earnings revisions are mildly positive and improving in Germany and Sweden. (2 charts)
Source: MRB Partners
Source: MRB Partners
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5. Extreme energy prices caused a lot of fatalities this past winter.
Source: The Economist Read full article
6. Next, we have some data on EU prisons.
Source: Eurostat Read full article
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Asia-Pacific
1. Japan’s TOPIX hit a multi-decade high.
Source: @winnieuu0316, @aya_wagatsuma, @markets Read full article
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2. Australia’s consumer confidence declined this month.
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China
1. Industrial production surprised to the downside, …
…with output gains driven by state enterprises.
2. Retail sales were also softer than expected.
The big spike (above) is from last year’s low base (due to lockdowns).
Source: @economics Read full article
3. Property investment is running well below the 2022 and 2021 levels.
4. The unemployment rate edged lower, but youth unemployment climbed above 20%.
5. The renminbi has been weakening, with USD/CNH testing resistance at the 200-day moving average.
Source: barchart.com
6. China’s stocks have been lagging behind EM peers.
Source: S&P Dow Jones Indices
Investor optimism is fading.
Source: BofA Global Research
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Emerging Markets
1. India’s trade deficit narrowed more than expected, …
… as imports slumped.
India’s wholesale prices are now down on a year-over-year basis.
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2. Turkey’s assets are under pressure.
Source: Reuters Read full article
• USD-denominated bonds:
• Sovereign CDS spread:
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Cryptocurrency
1. Bitcoin’s correlation with Ether has weakened to the lowest level in two years.
Source: @KaikoData
2. The BTC/ETH price ratio is holding support above its 200-day moving average.
Source: @StocktonKatie
3. Here is a look at year-to-date risk-adjusted returns of select altcoins.
Source: @KaikoData
4. Crypto funds saw the fourth consecutive week of outflows.
Source: CoinShares Read full article
Bitcoin-focused funds accounted for most outflows, while altcoin funds saw inflows.
Source: CoinShares Read full article
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Commodities
1. Industrial metals continue to retreat.
• Copper:
• Nickel:
• Bloomberg’s industrial metals index:
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2. Silver is under pressure.
3. Global fund managers are souring on commodities.
Source: BofA Global Research
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Equities
1. Investors still view long tech mega-caps as the most crowded trade.
Source: BofA Global Research
2. Hedge funds’ stock picks have been strong outperformers.
3. US equity valuations are near the top of their historical range.
Source: Goldman Sachs
4. US and European equities no longer offer an attractive yield compared to credit.
Source: Goldman Sachs
• The S&P 500 earnings yield is at multi-year lows relative to real yields.
Source: Goldman Sachs
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5. Positive earnings surprises haven’t been met with a lot of enthusiasm.
Source: @FactSet Read full article
6. Systematic equity positioning, such as risk parity and vol control, is moving into bullish territory.
Source: Deutsche Bank Research
7. This chart shows the year-over-year S&P 500 real return attribution from Numera Analytics.
Source: Numera Analytics (@NumeraAnalytics)
8. Volatility measures continue to trend lower.
The S&P 500 went an entire week without a 1% daily swing for the third time this quarter.
Source: @WillieDelwiche
• Equity options markets are not concerned about elevated short-term rate uncertainty.
Source: @TheTerminal, Bloomberg Finance L.P.
• But option skew has been climbing, signaling increased demand for downside protection.
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Credit
1. Regional banks’ bond yields remain elevated.
2. Leveraged loan funds continue to see outflows.
Source: Deutsche Bank Research
3. Global credit downgrades and defaults surged in March, led by the US and LatAm. (2 charts)
Source: S&P Global Ratings
Source: S&P Global Ratings
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4. Investors remain concerned about commercial real estate.
Source: BofA Global Research
Commercial real estate debt as a share of GDP is much smaller than mortgages.
Source: MRB Partners
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Global Developments
1. The rise in cyclical stocks relative to defensives could reflect improving global growth, although commodities have not confirmed a cycle shift. (2 charts)
Source: Goldman Sachs
Source: Goldman Sachs
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2. Global forward earnings continue to slide, although upward revisions ticked up slightly in April.
Source: MRB Partners
3. Tech exports are rebounding.
Source: Gavekal Research
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Food for Thought
1. Number of US passports issued:
Source: @chartrdaily
2. The self-checkout option:
Source: @CivicScience Read full article
3. Share of US goods imports from China:
Source: @WSJ Read full article
4. Six Flags 2022 results visualized:
Source: @chartrdaily
5. If money were no object, where would you prefer to move?
Source: Home Bay; h/t Walter Read full article
6. Least-affordable housing markets:
Source: Statista
7. Support for Russia around the world:
Source: The Economist Read full article
8. Migrant deaths:
Source: Statista
9. Tracing crime guns to purchasers:
Source: USAFacts
10. The invasive spotted lanternfly:
Source: @axios Read full article
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