The Daily Shot: 15-Feb-24
• The United States
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Australia
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. The NFIB small business sentiment index declined last month, …
… as sales expectations deteriorated (partially due to frigid weather conditions).
• Hiring continues to slow.
• The index of compensation plans eased.
• Fewer businesses are boosting selling prices.
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2. Mortgage rates have been rising.
• Mortgage applications are holding at multi-year lows.
This chart shows the rate lock count.
Source: AEI Housing Center
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3. A pullback in retail sales last month?
Source: Earnest InsightsÂ
4. Excess savings remain elevated for high earners.
Source: BCA Research
5. Next, we have some updates on the labor market.
• Discussions of layoffs have increased in the latest quarter’s earnings calls.
Source: Goldman Sachs; @MikeZaccardi
• WARN notices signal higher jobless claims ahead (2 charts).
Source: Pantheon Macroeconomics
Source: Oxford Economics
• Job postings on Indeed are running slightly above 2023 levels.
Source: @indeed
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6. Leading indicators continue to signal a rebound in US manufacturing activity.
Source: Morgan Stanley Research; @WallStJesus
7. Companies are still grappling with supply chain issues.
Source: Goldman Sachs; @MikeZaccardi
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The United Kingdom
1. The economy slipped into a technical recession at the end of last year. We will have more on the UK GDP report tomorrow.
2. On a 3-month basis, inflation is hitting the BoE’s target.
Source: @DanielKral1, @OxfordEconomics
3. The official index of home price appreciation remains in negative territory year-over-year.
4. As we saw earlier, new employment data shows a tighter labor market.
Source: @economics Read full article
5. Brexit didn’t hurt London’s derivatives clearing business.
Source: @financialtimes Read full article
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The Eurozone
1. The euro-area economy managed to avoid a recession.
• After three consecutive declines the Dutch economy returned to growth last quarter.
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2. The Eurozone’s industrial production surged in December.
Here is the manufacturing output.
Source: @WSJ Read full article
Much of the gain was driven by Ireland, where economic data tends to be lumpy.
Source: @DanielKral1, @OxfordEconomics
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3. The median estimate for the neutral rate has risen by about 30 basis points compared with levels in mid-2019 before the onset of the pandemic.
Source: ECB
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Europe
1. Let’s begin with Norway.
• The economy returned to growth in Q4.
• The decline in Norway’s business confidence and production outlook points to weakness in real GDP.
Source: Alpine Macro
• A build-up of slack could exert downward pressure on underlying inflation in Norway.
Source: Alpine Macro
• EUR/NOK has deviated far above purchasing power parity.
Source: Alpine Macro
– EUR/NOK is trading below resistance at its 40-week moving average.
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2. Poland’s economy avoided a contraction last quarter.
3. Here is a look at inflation for store-bought pizza and quiche in the EU.
Source: Eurostat Read full article
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Japan
1. The economy unexpectedly slipped into technical recession last quarter, …
… dragged lower by weak domestic demand (consumer spending and business investment).
Source: ING
Source: CNBC Read full article
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2. The authorities are not happy with the weakening of the yen past 150 to the dollar.
Source: Reuters Read full article
• Traders are betting on an intervention.
Source: @markets Read full article
• Here is the yen trade-weighted index.
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3. Stocks continue to surge.
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Australia
1. The employment report surprised to the downside again.
• The unemployment rate climbed …
… and may have further to rise.
Source: Capital Economics
• The participation rate edged lower.
2. Bond yields dropped in response to the soft employment report.
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Emerging Markets
1. Argentina’s CPI blasted past 250% last month.
2. Will Banxico wait for the Fed to cut rates?
Source: Wells Fargo Securities
3. Here is a look at country weights in the MSCI EM Index in 2020 and 2024.
Source: MSCI
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Cryptocurrency
1. BTC/USD has only spent 125 trading days above $52K. Could we see a new all-time high soon?
Source: @KaikoData
2. Open interest in the bitcoin perpetual futures market is rising, suggesting renewed speculative interest among traders.
Source: @KaikoData
3. This table shows US spot-bitcoin ETF flows since the January launch date.
Source: CoinShares
4. Here is a comparison of risk/return metrics for crypto and traditional assets included in a balanced portfolio.
Source: CoinShares Read full article
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Commodities
1. US grain prices continue to sink.
• Bloomberg’s grains index:
• Soybeans:
• Soy meal:
• Corn:
• HRW wheat:
Will we see a pullback in food prices as a result?
Source: @RenMacLLC
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2. Canola futures are hitting multi-year lows.
3. US cotton futures are climbing.
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Energy
1. US oil inventories jumped last week, while refined product stockpiles continue to ease.
• Weekly changes:
• Inventory levels:
• Oil days of supply:
2. Last week saw a further decline in refinery inputs and utilization rates.
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3. Here is a look at Permian production by company.
Source: @JavierBlas, @opinion Read full article
4. Lower US oil production ahead?
Source: Longview Economics
5. The US natural gas futures drawdown has been massive.
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Equities
1. The S&P 500 is entering a seasonally challenging period of the month.
h/t @RyanDetrick
2. The S&P 500 typically rises during election years, especially if the incumbent party wins.
Source: Citi Private Bank
3. As measured by the Cumulative Advance-Decline Line, the breadth of the Nasdaq Composite has remained depressed even as the index surged in recent months.
Source: @TheTerminal, Bloomberg Finance L.P.
4. According to Deutsche Bank, the combined annual profits of the US “Magnificent Seven” stocks surpass those of a wide array of listed securities across all non-US countries, excluding China and Japan.
Source: Deutsche Bank Research
5. Here is a look at share buybacks vs. dividends for US and European markets (GRANOLAS = GlaxoSmithKline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, AstraZeneca, SAP, Sanofi).
Source: Goldman Sachs; @MikeZaccardi
6. US shares have widened their outperformance vs. the rest of the world.
7. The Russell 2000 – S&P 500 implied volatility ratio is at multi-year highs.
Source: Barclays Derivatives Research; @dailychartbook
8. Asset managers are very long US equity futures.
Source: Morgan Stanley Research; @WallStJesus
9. The beta of hedge funds and mutual funds to the S&P 500 is exceptionally high, potentially exacerbating a downturn in the index.
Source: Morgan Stanley Research; @dailychartbook
Source: Morgan Stanley Research; @dailychartbook
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Credit
1. Here is a look at large banks’ loan book exposure.
Source: Citi Private Bank
2. Next, we have some updates on commercial real estate.
• Near-term debt maturities:
Source: BofA Global Research
• Time it would take to absorb current vacancies and under-construction inventory:
Source: Morgan Stanley Research; @AyeshaTariq
• CMBS interest-only loans:
Source: @markets Read full article
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Global Developments
1. Here is a look at passive and active fund flows.
Source: Goldman Sachs; @WallStJesus
2. How are various economies performing relative to expectations?
Source: Goldman Sachs; @MikeZaccardi
3. Investors view the global fiscal policy as too stimulative.
Source: BofA Global Research
4. Supply chain bottlenecks continue to be relatively mild.
Source: Goldman Sachs; @MikeZaccardi
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Food for Thought
1. Nvidia bubble?
Source: @financialtimes Read full article
2. EV market share in the US:
Source: @WSJ Read full article
• EV prices:
Source: @WSJ Read full article
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3. Largest semiconductor foundry companies:
Source: Visual Capitalist Read full article
4. Teacher qualifications in OECD countries (upper secondary education):
Source: OECD
5. Naval fleets:
Source: The Economist Read full article
• Navy battle force ships:
Source: @WSJ Read full article
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6. Cancer rates among younger adults:
Source: @WSJ Read full article
7. 2024 US Super Bowl ticket price inflation versus prior years:
Source: TickPick
• Super Bowl wins by team:
Source: FlowingData Read full article
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