Atlanta Fed’s wage growth tracker declined sharply in April

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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