While rents are down on a year-over-year basis, they continue to rise

The Daily Shot: 22-Aug-23
The United States
Canada
The United Kingdom
The Eurozone
Europe
Asia-Pacific
China
Emerging Markets
Cryptocurrency
Energy
Equities
Credit
Rates
Global Developments
Food for Thought



 

The United States

1. Let’s begin with some updates on the housing market.
 
Economists have been upgrading their forecasts for next year’s housing starts.
 

 
But residential construction is facing headwinds this year.
 
Source: Piper Sandler¬†  
 
The share of home purchases made by investors remains elevated.
 
Source: CoreLogic  
 
2. Home prices typically lead to the owner’s equivalent rent CPI by 18-24 months.
 
Source: PGM Global  
 
3. While rents are down on a year-over-year basis, they continue to rise.
 
Source: realtor.com  

——————–

 
4. So far, the US economy has been resilient.
 
Source: MRB Partners  
 
5. The World Economics SMI report shows that business confidence continued to deteriorate in August.
 
Source: World Economics  
 
Companies accelerated price hikes this month.
 
Source: World Economics  

——————–

 
6. This chart shows the drivers of consumers’ excess savings.
 
Source: Macrobond  


Back to Index

 

Canada

1. Economists are boosting their forecasts for next year’s CPI.
 

 
2. July housing starts were stronger than expected.
 

 
3. Home prices are rebounding.
 
Source: Scotiabank Economics  


Back to Index

 

The United Kingdom

1. Housing asking prices are now down on a year-over-year basis.
 

 
2. Gilt yields continue to climb.
 


Back to Index

 

The Eurozone

1. Germany’s producer prices are falling rapidly.
 

 
2. The Treasury-Bund spread has been widening.
 

 
3. Dutch house prices appear to have bottomed.
 

 
4. Who bought euro-area government debt during the ECB’s current policy tightening?
 
Source: Deutsche Bank Research  
 
5. The health of the euro area banking system improved in recent years.
 
Source: MRB Partners  
 
6. Manufacturing is a relatively small portion of the euro area economy.
 
Source: MRB Partners  


Back to Index

 

Europe

1. Bankruptcies have been rising in the EU.
 
Source: Eurostat   Read full article  
 
Source: Eurostat   Read full article  

——————–

 
2. This chart shows the share of European electricity generation by source.
 
Source: @WSJ   Read full article  
 
3. Poland’s industrial production remains below last year’s levels.
 


Back to Index

 

Asia-Pacific

1. JGB yields continue to climb.
 

 
2. Taiwan’s export orders were firmer than expected last month.
 

 
3. South Korea’s consumer confidence is holding up well.
 


Back to Index

 

China

1. Beijing managed to stabilize the renminbi.
 
Source: barchart.com  
 
Source: @markets   Read full article  

——————–

 
2. Soft business activity in advanced economies has been a drag on China’s exports.
 
Source: Numera Analytics (@NumeraAnalytics)  
 
3. Here is a look at trust funds’ exposure to property.
 
Source: Fitch Ratings  
 
4. The housing shock will be a drag on growth for some time.
 
Source: Goldman Sachs; III Capital Management  
 
5. Macau visitor numbers continue to rebound.
 

 
6. Next, we have a couple of demographic trends.
 
Dependency ratio:
 
Source: The Economist   Read full article  
 
Working-age population:
 
Source: @WSJ   Read full article  


Back to Index

 

Emerging Markets

1. Mexican retail sales were stronger than expected in June.
 

 
Here is a look at Mexico’s electricity generation by source.
 
Source: @JKempEnergy  

——————–

 
2. Colombia’s CPI decline is lagging behind other LatAm economies.
 
Source: @WSJ   Read full article  
 
3. How long will equity investors keep rotating from China to India?
 
Source: BCA Research  


Back to Index

 

Cryptocurrency

1. The correlation between bitcoin and the Nasdaq 100 Index spiked last week during the crypto sell-off.
 
Source: @StocktonKatie  
 
2. Bitcoin dipped below the average short-term holders’ cost basis.
 
Source: Glassnode   Read full article  
 
3. Implied volatility in the bitcoin options market spiked from historically low levels during last week’s sell-off.
 
Source: Glassnode   Read full article  
 
4. Fund managers are most concerned about crypto regulations, according to a survey by CoinShares.
 
Source: CoinShares   Read full article  
 
5. Crypto funds saw outflows last week, led by long-bitcoin products.
 
Source: CoinShares   Read full article  


Back to Index

 

Energy

1. Energy shares have been outperforming.
 

 
But the rout in alternative energy shares has accelerated.
 
Source: Gavekal Research  

——————–

 
2. CTAs have warmed up to crude oil.
 
Source: Deutsche Bank Research  


Back to Index

 

Equities

1. A breakout in the 10-year Treasury yield is not always bearish for stocks.
 
Source: @jasongoepfert  
 
2. The market didn’t cheer the Q2 earnings beats the way it typically does.
 
Source: Morgan Stanley Research; @AyeshaTariq  
 
3. Hedge funds have been trimming their equity exposure.
 
Source: Goldman Sachs; @dailychartbook  
 
4. Volatility typically rises as summer ends.
 
Source: LPL Research  
 
5. A model from Oxford Economics suggests that profit margins will decline from here, …
 
Source: Oxford Economics  
 
… pressuring earnings.
 
Source: Oxford Economics  

——————–

 
6. Tech fund flows remain strong.
 
Source: Deutsche Bank Research  
 
7. Return dispersion across US sectors has risen sharply this year.
 
Source: JP Morgan Research; @dailychartbook  


Back to Index

 

Credit

1. The Bank Term Funding Program usage keeps rising, suggesting that funding remains a challenge for some banks.
 
Source: @FactSet   Read full article  
 
Average short-term funding costs for smaller banks hit 5%.
 
Source: NerdWallet   Read full article  
 
S&P followed Moody’s in downgrading a number of US banks.
 
Source: Reuters   Read full article  

——————–

 
2. Smaller banks see much higher credit card delinquency rates than large lenders.
 
Source: Macrobond  
 
3. BDC assets under management continue to climb, boosted by private vehicles.
 
Source: @theleadleft  
 
4. The healthcare sector has seen a surge in bankruptcies this year.
 
Source: Quill Intelligence  
 
5. High-yield munis have been one of the top-performing US bond sectors over the past few years, …
 
Source: BCA Research  
 
… although high-yield muni spreads versus duration-matched Treasuries have significantly tightened, appearing historically expensive.
 
Source: BCA Research  


Back to Index

 

Rates

1. Technicals suggest that long-dated Treasuries are in oversold territory.
 

 
2. The gap between Treasury yields and the copper-to-gold ratio continues to widen.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
China’s PPI also points to lower Treasury yields.
 
Source: Alpine Macro  

——————–

 
3. The selloff in US inflation-linked bonds has been severe.
 

 
4. Asset managers have been taking a beating on the 10-year note futures.
 
Source: @johnauthers, @opinion   Read full article  
 
5. Here is a look at historical Treasury curve moves by type.
 
Source: Simon White, Bloomberg Markets Live Blog  


Back to Index

 

Global Developments

1. Rate expectations have declined more in the Eurozone and UK vs. the US.
 
Source: Oxford Economics  
 
2. The dollar has moved higher despite financial stress remaining broadly stable.
 
Source: Oxford Economics  


——————–

Back to Index

 

Food for Thought

1. Share of wealth held by the top 1%:
 
Source: Statista  
 
2. 735 million people are facing hunger.
 
Source: @TheDailyShot  
 
3. Growth in cyberattacks:
 
Source: @axios   Read full article  
 
4. US governor rankings:
 
Source: Morning Consult   Read full article  
 
5. Belief in spiritual entities:
 
Source: Gallup   Read full article  
 
6. Global coal consumption:
 
Source: Torsten Slok,¬†Apollo  
 
7. Seizures of fentanyl:
 
Source: @financialtimes   Read full article  
 
8. Google search volume for hot sauce brands:
 
Source: @chartrdaily  
 

——————–


Back to Index