The Daily Shot: 05-Sep-23
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. Hiring remained robust in August, but the labor market continues to soften.
Source: @economics Read full article
The downward trend remains intact.
Source: Morgan Stanley Research
– Healthcare now represents a more dominant share of new job gains.
Source: @TheTerminal, Bloomberg Finance L.P.
– The Yellow bankruptcy was a drag on payrolls in the logistics sector.
– And the Hollywood strike has been a drag on the information sector.
• The unemployment rate topped expectations.
• Labor force participation increased.
Source: Chart and data provided by Macrobond
• Temp help services jobs continue to trend lower.
• Wage growth slowed last month. These are the indicators the Fed has been monitoring for signs of labor market loosening.
We will have more updates on the labor market shortly.
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2. The jobs report reinforces the view that the Fed is likely done with rate hikes.
• The terminal rate dropped.
• But longer-dated Treasury yields moved higher as the curve steepened.
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2. The ISM Manufacturing PMI indicated a continued decline in US manufacturing activity, but the pace of contraction seems to be slowing.
Source: Reuters Read full article
• Demand remains soft.
• Costs are not falling as quickly as in July.
• The orders-to-inventories index is rebounding, …
… pointing to stronger factory activity ahead.
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3. Automobile sales eased last month.
4. Residential construction spending continues to rebound.
Source: Chart and data provided by Macrobond
Source: Reuters Read full article
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5. Total real spending on computers and software is expected to rise roughly 50% above its existing trend.
Source: Wells Fargo Securities
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Canada
1. The GDP unexpectedly contracted last quarter. Is the economy in recession?
Source: Reuters Read full article
The market now anticipates the BoC to maintain rates steady this month, possibly extending into October.
Short-term bond yields fell.
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2. Manufacturing contraction accelerated in August.
Source: Reuters Read full article
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3. Small business activity edged higher in August.
Here are the components.
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4. Wages continue to outpace inflation.
Source: Scotiabank Economics
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The United Kingdom
1. Home price declines haven’t been this severe since the GFC.
Source: @economics Read full article
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2. The manufacturing PMI weakness bodes poorly for industrial production.
Source: S&P Global PMI
Source: Pantheon Macroeconomics
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The Eurozone
1. The Sentix Investor Confidence index declined more than expected.
2. The updated manufacturing PMI measure shows euro-area factories still struggling.
Source: S&P Global PMI
Source: Pantheon Macroeconomics
Here is Italy and Spain.
Source: S&P Global PMI
Source: S&P Global PMI
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3. Germany’s trade surplus was lower than expected in July.
4. Employment growth is expected to slow.
Source: Capital Economics
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Asia-Pacific
1. Japan’s services growth remains robust.
Source: S&P Global PMI
2. Next, we have some updates on South Korea.
• The GDP growth (a rebound):
• Exports (holding up):
• Inflation (moderating):
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3. Here are some updates on Australia.
• The Aussie dollar is sharply lower after the RBA left rates unchanged again.
• Inflation remains high.
• Corporate profits took a hit in Q2.
• CapEx plans remain strong.
Source: @ANZ_Research
• Here is a look at the shift to renewables.
Source: RBA Read full article
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China
1. Growth in services slowed last month.
2. Offshore bond issuance remains depressed.
Source: Fitch Ratings
3. The number of labor strikes increased in Q1 as the economy reopened.
Source: Pantheon Macroeconomics
4. China faces water shortages.
Source: Brookings Read full article
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Emerging Markets
1. Let’s run through some PMI reports for August.
• India (remarkably strong):
Source: S&P Global PMI
• Vietnam (manufacturing back to growth):
Source: S&P Global PMI
• ASEAN (expansion continues):
Source: S&P Global PMI
• South Africa (stabilizing):
• Turkey (manufacturing back in contraction):
• Brazil (back to growth):
Source: S&P Global PMI
• Mexico (slower expansion):
Source: S&P Global PMI
• Colombia (crashing):
Source: S&P Global PMI
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2. Turkey’s inflation is surging.
The Q2 GDP growth topped expectations.
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3. Here is a look at LatAm policy rate forecasts.
Source: Numera Analytics (@NumeraAnalytics)
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Cryptocurrency
1. Crypto funds saw minor outflows last week, although long-bitcoin products attracted fresh capital. (2 charts)
Source: CoinShares Read full article
Source: CoinShares Read full article
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2. The SEC delayed making a decision on spot-bitcoin ETF applications until October.
Source: CoinDesk Read full article
3. ETH/USD is testing support at its 40-week moving average, although upside momentum has slowed.
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Commodities
1. It’s been a good couple of months for cotton futures. Hopes for stronger demand from China and tighter supplies have been supporting prices.
2. This map illustrates the areas expected to be impacted by El Niño.
Source: USDA
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Energy
1. Crude oil prices have diverged from US market-based inflation expectations.
Source: @TheTerminal, Bloomberg Finance L.P.; h/t @themarketear
2. Oil service stocks are displaying relative strength.
Source: The Crude Chronicles
3. India continues to buy a lot of crude oil from Russia.
Source: Business Standard Read full article
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Equities
1. Here is a look at operating margins by company size.
Source: PGM Global
Are margins headed lower?
Source: PGM Global
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2. US funds saw some ouflows in August.
Source: @WSJ Read full article
3. Retail purchases have slowed recently.
Source: Vanda Research
But softer ETF demand was more about fixed income than equities.
Source: Vanda Research
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4. More IPOs on the way?
Source: Jack Ablin, Cresset Wealth Advisors
• US IPO deal value over time:
Source: Jack Ablin, Cresset Wealth Advisors
• Global IPOs by sector:
Source: @genuine_impact
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5. So far, VIX has diverged from its seasonal pattern.
Source: SentimenTrader
VIX broke below its uptrend from 2018. Are we entering a low-vol regime?
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Credit
1. The Fed’s RRP (reverse repo program) balances declined sharply in recent days, ..
… which should boost bank deposits.
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2. Corporate debt as a share of GDP has been trending higher even as household debt continues to decline.
Source: @5thrule, @TheTerminal, Bloomberg Finance L.P. Read full article
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Global Developments
1. Global factory activity remains in contraction mode.
Source: S&P Global PMI
2. Most global assets were down in August, although oil prices saw a third consecutive monthly gain.
Source: Deutsche Bank Research
3. According to Morningstar, as a group, unicorns (startups valued > $1bn) are worth more than the publicly traded companies of all countries except the US, China, and Japan.
Source: Morningstar Read full article
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Food for Thought
1. US federal government spending as a share of GDP:
Source: BofA Global Research
2. Satisfaction with K-12 education in the US:
Source: @axios Read full article
3. US maternal mortality rates:
Source: CDC
Source: @axios Read full article
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4. Views on moderate drinking:
Source: Gallup Read full article
5. Electricity generated from solar and wind:
Source: The New York Times Read full article
6. Mass shootings in the US:
Source: CNN Read full article
7. Turning to religion for meaning:
Source: Statista
8. Working hard (from home) or playing golf?
Source: Alex Finan (Stanford and INRIX) and Nick Bloom (Stanford)
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