Posted on by The Daily Shot Editor: Lev Borodovsky

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  

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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  

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

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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  

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The United Kingdom

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

 
2. Gilt yields continue to climb.
 

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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  

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Europe

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

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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.
 

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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.
 

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China

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

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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  

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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  

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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  

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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  

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Energy

1. Energy shares have been outperforming.
 

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

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

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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  

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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  

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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  

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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  

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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  

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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  

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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  

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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  
 

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