Posted on by The Daily Shot Editor: Lev Borodovsky

Job switching has become less lucrative

The Daily Shot: 19-Mar-24
• The United States
• Canada
• The Eurozone
• Japan
• Australia
• China
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought

 

The United States

1. Let’s begin with the housing market.
 
• Sentiment among homebuilders is on the rise.
 

 
Source: Reuters   Read full article  
 
• Property listings are above last year’s levels, …
 
Source: Redfin  
 
… with the supply duration (measured in months) reaching multi-year highs.
 
Source: Redfin  
 
– But asking prices are at record levels for this time of the year.
 
Source: Redfin  
 
• The University of Michigan consumer sentiment survey indicates that households are becoming marginally more positive about the home-buying conditions, up from record lows.
 

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2. Fewer service firms based in the NY Fed’s district (which includes New York State, northern New Jersey, and southwestern Connecticut) plan to raise wages.
 

 
But more firms report rising costs and plans to boost prices.
 

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3. Companies have been able to offset labor cost growth by a combination of raising productivity and prices.
 
Source: Deutsche Bank Research  
 
• Wage inflation tends to drive labor productivity.
 
Source: BofA; @MikeZaccardi  
 
• This chart shows the effective minimum wage.
 
Source: Goldman Sachs; @MikeZaccardi  
 
• Leading indicators continue to suggest that wage growth is moderating (2 charts).
 
Source: Oxford Economics  
 
Source: @nick_bunker   Read full article  
 
• Job switching has become less lucrative.
 
Source: Oxford Economics  

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4. M2 money supply has been contracting, but the level remains above trend.
 
Source: Gavekal Research  

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Canada

1. Existing home sales unexpectedly declined last month.
 

 
2. Consumer sentiment continues to recover.
 

 
3. The labor market is losing steam.
 
Source: Economics and Strategy Group, National Bank of Canada  

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The Eurozone

1. Economists have further reduced their 2024 growth forecasts for Germany to a mere 0.1%.
 

 
However, growth forecasts for Italy and Spain have been revised upward.
 

 

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2. Here is a look at the euro-area CPI contributions (year-over-year).
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
3. The euro-area trade surplus hit a record high.
 

 
Source: @financialtimes   Read full article  

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4. Fund managers have been increasing their allocations to Eurozone equities.
 
Source: BofA Global Research  

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Japan

1. The BoJ finally exited its negative-rate policy and abandoned yield curve control, …
 
Source: CNBC   Read full article  
 

 
… as wage growth accelerated (2 charts).
 
Source: Deutsche Bank Research  
 
Source: @economics   Read full article  
 
Source: @financialtimes   Read full article  
 
Nevertheless, the Bank of Japan’s rate hike was offset by its dovish tone.
 
• The yen and JGB yields declined.
 

 

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2. Machinery orders have been trending lower.
 

 
Source: Reuters   Read full article  

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Australia

The RBA dropped its tightening bias.
 
Source: @economics   Read full article  
 
Bond yields and the Aussie dollar declined.
 

 

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China

1. Existing home prices remain under pressure.
 
Source: @WSJ   Read full article  
 
2. Household savings are very high relative to other large nations.
 
Source: Gavekal Research  
 
Source: Alpine Macro  

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3. The result of China’s investment boom has been an extended decline in the marginal product of capital.
 
Source: Gavekal Research  

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Cryptocurrency

1. The crypto rally is fading, with bitcoin dipping below $65k.
 

 
• The pullback is putting pressure on memecoins, …
 

 
… which have surged in recent weeks.
 
Source: CoinTelegraph   Read full article  

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2. The SOL/BTC ratio has retraced roughly 60% of its 2022 decline.
 

 
Source: @crypto   Read full article  

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3. The total crypto market cap has been approaching its all-time high.
 

 
4. Crypto funds saw another record week of inflows.
 
Source: CoinShares   Read full article  
 
Bitcoin-focused funds accounted for most inflows last week, while smart-contract funds holding Ethereum and Solana experienced outflows.
 
Source: CoinShares   Read full article  

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Commodities

1. Money managers have been boosting their positions in gold futures.
 

 
2. Cocoa prices continue to hit record highs.
 

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Energy

1. This chart shows the 2023 global crude oil and condensate production by country with a decade trend for the top three producers.
 
Source: @EIAgov   Read full article  
 
• Here is the evolution of crude oil production in the US by source.
 
Source: The Economist   Read full article  

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2. Global oil demand projections have diverged. Are the “net zero” forecasts a fantasy?
 
Source: The Economist   Read full article  
 
 
3. Below is the breakdown of products derived from a barrel of oil.
 
Source: @EIAgov  

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Equities

1. Flows into US equity funds have been outpacing other markets.
 
Source: Deutsche Bank Research  
 
Tech funds have been the largest beneficiary.
 
Source: Deutsche Bank Research  
 
2. Earnings call sentiment has been improving.
 
Source: @GinaMartinAdams  
 
3. Fund managers still see “long Magnificent 7” as the most crowded trade.
 
Source: BofA Global Research  
 
4. Here is a look at tech sector concentrations globally.
 
Source: Goldman Sachs; @MikeZaccardi  
 
5. CTAs have been increasingly bullish on stocks.
 
Source: Deutsche Bank Research  
 
6. The US equity market cap does not look excessive when compared with the global money supply. (Big four: US, China, Eurozone, Japan).
 
Source: Gavekal Research  
 
7. The S&P 500 price has been outpacing valuations (forward P/E ratio).
 
Source: @TheTerminal, Bloomberg Finance L.P.; h/t Morgan Stanley  
 
8. Small caps have been more correlated to Treasury prices than the S&P 500.
 

 
As bond yields have risen recently, the market breadth of the Russell 2000 has lagged behind that of the S&P 500.
 
Source: @TheTerminal, Bloomberg Finance L.P.; h/t Morgan Stanley  

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9. Valuation dispersion has remained elevated since the start of the pandemic.
 
Source: Goldman Sachs; @MikeZaccardi  

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Credit

1. Fewer fund managers see companies as being overleveraged.
 
Source: BofA Global Research  
 
2. Strong annuity sales continue to drive the insurance industry’s demand for credit products.
 
Source: Torsten Slok, Apollo  
 
3. Office occupancy is holding near 60% of its pre-COVID levels.
 
Source: @axios   Read full article  

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Global Developments

1. Investors increasingly see inflation as the key tail risk.
 
Source: BofA Global Research  
 
2. Here is a look at equity markets’ beta to global manufacturing activity.
 
Source: Oxford Economics  
 
3. Finally, we have productivity trends in select economies.
 
Source: @GregDaco  

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Food for Thought

1. Households’ financial confidence (2 charts):
 
Source: Bank of America Institute  
 
Source: Bank of America Institute  

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2. Share of global stock market capitalization by country over the past 50 years:
 
Source: Goldman Sachs; @MikeZaccardi  
 
3. Global GDP shares by region over the past two millennia:
 
Source: Deutsche Bank Research  
 
4. Biggest arms importers:
 
Source: @financialtimes   Read full article  
 
5. US opioid prescription rate over time:
 
Source: JP Morgan Research; III Capital Management  
 
6. Lifecycle CO2 emissions of EV vs. ICE vehicles:
 
Source: @BloombergNEF   Read full article  
 
7. Most dangerous states to make a U-turn:
 
Source: Stone Injury Lawyers  
 

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