The Daily Shot: 14-Mar-24
• The United States
• The United Kingdom
• The Eurozone
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Global Developments
• Food for Thought
The United States
1. Let’s begin with some updates on the US consumer.
• So far, Fed rate hikes have had a limited impact on households’ financial burdens.
Source: Bank of America Institute
But higher borrowing costs are making their way through the economy.
Source: Morgan Stanley Research; @WallStJesus
• Debit/credit card spending declined in February year-over-year for higher-income households, …
Source: Bank of America Institute
… who drive much of the consumer spending in the US.
Source: Bank of America Institute
• Consumer sentiment is more robust among higher-income brackets.
Source: Bank of America Institute
• Household balance sheets remain strong.
Source: @sonusvarghese
• US households’ disposable income growth is expected to slow this year but still outpace other advanced economies.
Source: Oxford Economics
• Work-from-home continues to impact consumer spending patterns.
Source: Oxford Economics
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2. Mortgage applications are still running below last year’s levels.
Here is the trend for rate locks.
Source: AEI Housing Center
• The mortgage rate is holding below 7%.
Source: Mortgage News Daily
• This chart shows home price appreciation by price tier.
Source: AEI Housing Center
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3. Labor productivity at large US firms is rising again.
Source: BofA Global Research
4. Companies are more upbeat about CapEx than the market had been expecting.
Source: BofA Global Research
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The United Kingdom
1. The monthly GDP estimate edged higher in January. The GDP level has been relatively static over the past two years.
Source: @financialtimes Read full article
– Services:
– Manufacturing (unchanged from December):
– Construction output:
• The trade deficit widened.
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2. The housing market continues to strengthen.
Source: Reuters Read full article
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3. Health and education have accounted for a greater share of public spending than defense in the post-WWII era.
Source: Deutsche Bank Research
4. The UK tax burden has been rising.
Source: @financialtimes Read full article
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The Eurozone
1. Industrial output declined sharply in January, more than reversing the Ireland-driven December surge.
Source: @DanielKral1, @OxfordEconomics
• Vehicle production slowed.
• Stronger factory activity in Sweden signals a rebound in Germany’s manufacturing production.
Source: @DanielKral1, @OliverRakau
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2. Excess liquidity in the Eurozone’s banking system remains elevated.
Source: @economics Read full article
3. Container shipping costs from Asia are gradually moderating.
Source: @TheTerminal, Bloomberg Finance L.P.
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China
1. The yield curve has been flattening.
Source: @shuli_ren, @opinion Read full article
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2. Money supply growth has slowed considerably alongside weaker GDP in recent years.
Source: TS Lombard
3. China’s housing vacancy rate is among the highest in the world.
Source: SOM Macro Strategies
4. China’s carbon intensity has been declining rapidly.
Source: ING
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Emerging Markets
1. Mexico’s manufacturing output was softer than expected in January.
2. Growth in Turkey’s industrial production continues to slow.
3. Turkey has accounted for a growing share of venture capital deal activity in the MENA region.
Source: PitchBook
• Overall, deal activity has softened in the MENA region, while early-stage ventures have gained market share. (2 charts)
Source: PitchBook
Source: PitchBook
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4. Vietnam’s vehicle sales have been very soft.
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Commodities
1. Copper surged on Wednesday, …
Source: Reuters Read full article
… boosting copper miners’ share prices (2 charts).
• BCA Research expects the copper market to swing to a small surplus this year, which could weigh on prices.
Source: BCA Research
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2. Gold ETFs’ holdings continue to sink (2 charts).
• Silver is outperforming gold this week.
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3. Dry bulk shipping costs are running well above last year’s levels.
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Energy
1. Crude oil futures advanced on Wednesday.
Source: @markets Read full article
2. US crude oil inventories unexpectedly dropped last week, accompanied by a significant reduction in gasoline stockpiles.
– Weekly changes:
– Levels:
• Gasoline demand strengthened.
• Refinery inputs and utilization improved further.
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3. US gasoline prices at the pump are headed higher.
Source: @TheTerminal, Bloomberg Finance L.P.
4. Crack spreads are rising, which has been a tailwind for refinery businesses.
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Equities
1. Regional banks continue to widen their underperformance, …
… as earnings expectations deteriorate.
Source: @TheTerminal, Bloomberg Finance L.P.
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2. Share buybacks are now running above their seasonal trend.
Source: BofA Global Research
3. Tesla continues to weigh on the consumer discretionary sector.
• Numera Analytics sees a greater chance of consumer staples outperforming consumer discretionary over the next six to 12 months.
Source: Numera Analytics (@NumeraAnalytics)
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4. US large-cap growth stocks are trading at a significant valuation premium relative to the broader market.
Source: MRB Partners
5. The top ten stocks have played a major role in driving S&P 500 returns.
Source: Goldman Sachs; @MikeZaccardi
6. Here is a look at the tech sector’s share of the overall market cap.
Source: @IanRHarnett, @asr_london
7. The Magnificent 7 valuations are not extreme relative to the rest of the market.
Source: JP Morgan Research; @dailychartbook
8. Markets often remain in overbought territory significantly longer than in oversold conditions.
Source: Simon White, Bloomberg Markets Live Blog
9. Small-cap implied volatility premium over large caps is narrowing.
10. Single-stock options volume is once again above shares’ volume.
Source: Goldman Sachs; @WallStJesus
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Global Developments
1. The dollar has corrected too far, given reduced US rate cut expectations.
Source: TS Lombard
2. Consensus GDP estimates for developed markets have risen.
Source: Numera Analytics (@NumeraAnalytics)
3. Here is a look at the resurgence of national industrial policies.
Source: International Monetary Fund
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Food for Thought
1. Biggest cocoa producers:
Source: Visual Capitalist Read full article
2. Global smartphone shipments:
Source: semafor
3. Pizza chains:
Source: @chartrdaily
4. Spending on streaming services:
Source: BofA Global Research
5. Fertility rates:
Source: Statista
6. Educational requirements in job postings by sector:
Source: Indeed Read full article
7. Geographic distribution of US crops:
Source: Data Stuff Read full article
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