Posted on by The Daily Shot Editor: Lev Borodovsky

Americans with disabilities increasingly participate in the labor force

The Daily Shot: 06-Sep-23
• The United States
• Canada
• The Eurozone
• Europe
• Japan
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Food for Thought

 

The United States

1. All signs point to a retreat in consumption in the months ahead.
 
• Shrinking excess savings:
 
Source: Torsten Slok, Apollo  
 
• The resumption of student loan payments:
 
Source: Goldman Sachs; @MikeZaccardi  
 
• Consumer spending intentions:
 
Source: Morgan Stanley Research  
 
The pullback may have already started. Morgan Stanley sees core retail sales declining sharply in August.
 
Source: Morgan Stanley Research  

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2. Next, we have some updates on the labor market.
 
• Payrolls growth remains well below the pre-COVID trend.
 

 
• The Household Survey for August once again reported higher job gains than the official figures from the Establishment Survey.
 

 
• Payrolls figures have been persistently revised down this year (2 charts).
 
Source: Piper Sandler   
 
Source: Deutsche Bank Research  
 
Job openings revisions have also been negative.
 
h/t @5thrule  
 
• Americans with disabilities increasingly participate in the labor force.
 

 
• This chart shows the labor force participation rate for mothers with children under five.
 
Source: @axios   Read full article  
 
• Job hopping is losing its luster.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
• Small business wage growth held near 4% in August.
 
Source: Paychex, IHS Markit  
 
• Goldman sees job gains stabilizing near 100k per month.
 
Source: Goldman Sachs; @MikeZaccardi  
 
• Finally, we have some job growth trends by industry.
 
– August changes:
 
Source: Oxford Economics  
 
– Business services:
 

 
– Construction (resilient):
 

 
– Manufacturing (a rebound):
 

 
– Public school teachers (still challenging to recruit):
 

 
Source: @WSJ   Read full article  

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3. Excluding transportation, factory orders in July surpassed expectations.
 

 
4. Business applications remain elevated.
 
Source: Arcano Economics  

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Canada

1. How much do rate hikes impact inflation?
 
Source: Scotiabank Economics  
 
2. Inflation expectations remain elevated.
 
Source: Scotiabank Economics  
 
3. Is the loonie undervalued?
 
Source: ING  

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The Eurozone

1. The final services PMI report for August was even worse than the flash figure.
 

 
– Italy:
 
Source: S&P Global PMI  
 
– Spain:
 
Source: S&P Global PMI  
 
– France:
 
Source: S&P Global PMI  
 
• Services input price gains accelerated last month.
 

 
• Here is the final Eurozone Composite PMI.
 
Source: S&P Global PMI  

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2. Fewer firms expect to be raising prices.
 
Source: ECB  
 
3. 30-year bond yields are grinding higher across the Eurozone.
 

 
• Euro Area sovereign bonds are no longer extremely oversold, according to MRB Partners.
 
Source: MRB Partners  
 
• German 10-year government bonds are stuck in a range, declining from short-term overbought levels. Will we see a breakout in yields? (2 charts)
 

 

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4. German home prices continue to trend down.
 
Source: Commerzbank Research  

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Europe

1. Swiss economic growth stalled last quarter.
 

 
• Inflation is moderating.
 

 
• Manufacturing contraction persists.
 

 
• The Swiss franc’s strength is squeezing exporters.
 

 
Source: @luxury   Read full article  

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2. Central European manufacturing hubs continue to struggle.
 
Source: S&P Global PMI  
 
Source: S&P Global PMI  

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3. Bankruptcies keep climbing in the EU.
 
Source: Torsten Slok, Apollo  

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Japan

1. The yen continues to weaken. Will USD/JPY hit 150?
 

 
2. Households cut back on spending as inflation takes a toll.
 
Source: @economics   Read full article  

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China

1. The renminbi hit the lowest level vs. USD since 2007.
 

 
2. Over the past ten years, the CSI 300 Index has typically struggled in Q3.
 
Source: Kyaw Swar Ye Myint  
 
3. News sentiment is extremely negative regarding China.
 
Source: SentimenTrader  
 
4. The PBoC increased its gold stash this year. According to ANZ, a reduction of Treasury holdings and efforts to reduce its exposure to the dollar may have been behind this move.
 
Source: @ANZ_Research  
 
5. China’s property bust and deflation path look similar to Japan’s.
 
Source: SOM Macro Strategies  

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Emerging Markets

1. Let’s begin with Chile.
 
• Another aggressive rate cut:
 

 
• The Chilean peso (a sharp decline):
 

 
• Economic activity:
 

 
• Industrial production:
 

 
• Copper output (in line with 2022):
 

 
• Retail sales:
 

 
• Business confidence:
 

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2. Argentina’s vehicle production hit a multi-year high.
 

 
3. Indonesia’s CPI continues to moderate.
 

 
4. EM debt funds keep seeing outflows.
 
Source: BofA Global Research  

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Commodities

1. Platinum hit resistance near $1,000/oz.
 

 
2. Get ready to pay up for Halloween candy (2 charts).
 

 

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3. Rice futures keep climbing.
 

 
Source: @markets   Read full article  

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4. The diamond market has been under pressure.
 

 
Source: IDEX  
 
Source: @luxury   Read full article  

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Energy

1. Brent futures broke above $90/bbl.
 

 
… despite the US dollar’s surge.
 

 
Source: Reuters   Read full article  

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2. It was a good first half of the year for US crude oil and natural gas production.
 
Source: @JKempEnergy  
 
3. Energy capex is starting to rise outside of the US.
 
Source: The Crude Chronicles  

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Equities

1. US small caps continue to lose ground to the S&P 500.
 

 
The same holds true for international shares.
 
h/t @MikeZaccardi  

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2. Analysts continue to upgrade earnings estimates.
 
Source: @FactSet   Read full article  
 
Are the projections too optimistic?
 
Source: J.P. Morgan Asset Management  

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3. Elevated real rates suggest that valuations are stretched, …
 
Source: @markets   Read full article  
 
… especially in tech.
 
Source: @TheTerminal, Bloomberg Finance L.P.  

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4. Tighter financial conditions typically correspond to higher dividend yields.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
5. The total return of US stocks relative to bonds spiked since the pandemic low and is at the highest level since the dot-com bubble.
 
Source: @bespokeinvest  
 
 
6. Next, we have some sector trends.
 
• Utilities:
 

 
• Energy (leadership returns):
 

 
• Banks:
 
Source: Citi Private Bank  
 
• REITs:
 
Source: Citi Private Bank  
 
• Operating leverage by sector:
 
Source: J.P. Morgan Asset Management  
 
• Mega-caps in perspective:
 
Source: Citi Private Bank  

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Credit

1. It’s going to be a busy month for corporate bond issuance, …
 
Source: @markets   Read full article  
 
… which is pressuring the Treasury market.
 
Source: Yahoo Finance   Read full article  

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2. Banks’ cost of funds surged this year.
 
Source: Citi Private Bank  
 
3. The cat bond market continues to expand.
 
Source: @WSJ   Read full article  

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Food for Thought

1. The market for recorded music:
 
Source: Goldman Sachs  
 
2. Complaints against credit reporting and repair service firms:
 
Source: USAFacts  
 
3. The most profitable companies:
 
Source: Statista  
 
4. Search activity for “new iPhone”:
 
Source: @chartrdaily  
 
5. Viewing time by format:
 
Source: @WSJ   Read full article  
 
6. Debt-to-income ratios:
 
Source: USAFacts  
 
7. Automatic Social Security benefit cuts after the fund becomes insolvent in ten years:
 
Source: Committee for a Responsible Federal Budget  
 
8. Black women candidates and nominees for the US Senate:
 
Source: Bloomberg Government   Read full article  
 
9. Trips to the veterinarian:
 
Source: @CivicScience   Read full article  
 

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