The Daily Shot: 08-Apr-24
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Japan
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. The employment report topped economists’ projections once again.
• Forecasters have faced challenges in accurately estimating job gains during the COVID era.
Source: @M_McDonough
• Part-time employment has surged, …
… while full-time employment has declined in recent months.
Source: @TheTerminal, Bloomberg Finance L.P.
• Job gains continue to be concentrated in three sectors: Leisure and Hospitality, Healthcare, and Government (mostly state and local government).
Source: @TheTerminal, Bloomberg Finance L.P.
Excluding these sectors, job growth has been tepid.
This chart employs dual y-axis scales to illustrate the divergence between the overall jobs trend and the trend excluding these three sectors.
• The Household Survey also showed job gains last month.
• The unemployment rate declined.
Below are the contributions to changes in the unemployment rate (Delta LF = change in the labor force; Delta U = change in unemployment).
Source: Mizuho Securities USA
– The unemployment rate among African Americans rose sharply.
Source: @economics Read full article
• After rapid declines, temp help service employment was roughly unchanged last month.
• The labor force participation rate increased.
But prime-age participation edged lower.
Source: @TheTerminal, Bloomberg Finance L.P.
Here are the trends among women and men.
Source: @TheTerminal, Bloomberg Finance L.P.
• There is talk of rising immigration driving job growth without hastening inflation. While growth in foreign-born population has rebounded, …
Source: Oxford Economics
… the overall population is still growing at only 0.5% per year. The rebound in the chart below was driven by increased immigration as well as fewer people dying from COVID.
Source: Scotiabank Economics
– Moreover, the prime-age population has grown by only 2% (in total) since the end of 2007, while the US GDP has increased by 34% over the same period.
– Growth in hours worked was only 0.4% in the first quarter.
Source: Scotiabank Economics
• Wage growth has been slowing.
Source: Oxford Economics
Here are the 3-month changes.
Source: Indeed Read full article
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2. The market no longer sees three Fed rate reductions this year, …
… with the probability of a June rate cut tumbling after the jobs report.
Treasury yield moved higher.
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3. The oldest age group has experienced the largest rise in real estate assets over the past five years.
Source: Deutsche Bank Research
4. Here is a look at how tariffs impact prices.
Source: Goldman Sachs; @MikeZaccardi
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Canada
1. The economy shed jobs for the first time in eight months, …
… with declines driven by younger workers.
Source: Scotiabank Economics
– Here is the breakdown by sector.
Source: Scotiabank Economics
• The unemployment rate rose.
Source: @economics Read full article
• The labor force participation rate held steady.
• Wage growth edged higher, …
.. with wages outpacing inflation.
Source: Scotiabank Economics
• Total hours worked jumped in the first quarter.
Source: Scotiabank Economics
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2. The Ivey PMI showed accelerating economic activity.
Price pressures are moderating.
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3. The Canadian dollar has been trending lower vs. USD.
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The United Kingdom
1. Construction activity is back in growth territory.
2. Hiring continues to slow.
Source: S&P Global PMI
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The Eurozone
1. Germany’s factory orders edged higher in February.
Industrial production increased again.
Source: Commerzbank Research
• Germany’s construction activity continues to decline (PMI < 50).
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2. Industrial production also improved in other euro-area economies.
• France:
• Spain:
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3. Eurozone real retail sales continue to trend lower.
Source: MarketWatch Read full article
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4. Traders keep trimming their bets on the euro.
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Europe
1. The Swiss central bank is growing its balance sheet again.
• Historically, Swiss equities have benefited from a falling franc.
Source: Mensur Pocinci; Julius Baer
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2. European cyclicals continue to surge relative to defensives.
3. Here is a look at projected European parliament group sizes with potential membership variability in 2024.
Source: @financialtimes Read full article
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Japan
1. Real wage growth remains negative.
Source: @economics Read full article
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2. The trade deficit was wider than expected in February.
3. The Economy Watchers Survey outlook index declined in March.
4. Dollar-yen is holding resistance at 152.
• Have bets against the yen become overextended?
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5. Short-term bond yields continue to climb.
Source: Reuters Read full article
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China
1. F/X reserves edged higher last month.
2. Beijing continues its attempts to halt the renminbi’s slide.
Source: @TheTerminal, Bloomberg Finance L.P.
Source: @markets Read full article
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3. The CSI 300 equity index is holding resistance at the 200-day moving average.
Source: @TheTerminal, Bloomberg Finance L.P.
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Emerging Markets
1. Breazil’s debt-to-GDP ratio increased in February as spending accelerated.
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2. Mexico’s vehicle production declined last month.
3. Here is a look at Saudi FX reserves.
Source: @economics Read full article
4. Thai inflation continues to ease.
5. Next, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Hedge funds have been boosting their bets on gold.
2. Bets on coffee futures continue to climb.
3. Here is a look at last week’s performance.
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Energy
1. The oil price rally has paused.
Source: NPR Read full article
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2. Traders are boosting their bets on US gasoline futures.
3. The US rig count increased last week.
4. Uranium miners’ shares have been outperforming.
Source: @markets Read full article
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Equities
1. The options market signals rising complacency.
Source: JP Morgan Research; @WallStJesus
• The stock market continues to ignore the ongoing pullback in rate cut expectations.
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2. The global supply of equities is shrinking, …
Source: @financialtimes Read full article
Source: JP Morgan Research; @WallStJesus
… as share buybacks outpace equity offerings.
Source: Goldman Sachs
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3. Cyclical sectors keep outperforming …
… and displaying positive trends relative to the S&P 500.
Source: SentimenTrader
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4. The S&P 500 remains in a low-vol regime, similar to what occurred during the 2017 market uptrend.
Source: Aazan Habib, Paradigm Capital
5. Are investors too pessimistic on small-cap earnings?
Source: MarketDesk Research
6. Global stock correlations reached a four-year low in March, which typically precedes market pullbacks.
Source: @GinaMartinAdams
7. Return dispersion has been elevated within the MSCI ACWI Index.
Source: BlackRock Investment Institute Read full article
8. Short interest in S&P 500 stocks has been rising.
Source: Goldman Sachs; @MikeZaccardi
9. Here are the most popular active equity ETFs this year.
Source: The ETF Shelf
10. Finally, we have some performance data from last week.
• Sectors:
• Equity factors/styles:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• The largest US tech firms:
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Credit
1. US investment-grade credit fundamentals are broadly stable.
Source: Breckinridge Read full article
2. US leveraged loan returns are holding up.
Source: PitchBook
3. Here is a look at last week’s performance.
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Rates
1. A combination of stronger growth optimism, rising inflation expectations, and a delayed outlook on Fed rate cuts have driven the rise in Treasury yields.
Source: Numera Analytics (@NumeraAnalytics)
2. Short-term rate volatility is back to its long-term average.
Source: Simon White, Bloomberg Markets Live Blog
3. BofA’s private clients have been rotating out of Treasury bills.
Source: BofA Global Research
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Global Developments
Stocks and bonds declined last week.
Source: @markets Read full article
Here is a look at market performance in advanced economies.
• Currencies:
• Bond yields:
• Large-cap equities:
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Food for Thought
1. Federal government regulations by industry:
Source: BofA Global Research
2. Tesla’s reputation:
Source: Reuters Read full article
3. Top-paying industries for lawyers:
Source: USAFacts
4. Housing foreclosure rates by state:
Source: Goldman Sachs; @MikeZaccardi
5. Bridges in poor condition:
Source: @axios Read full article
6. Political party differences in support for abortion pill access methods:
Source: @axios Read full article
7. Shifts in religious affiliation among US adults since childhood:
Source: @axios Read full article
8. Signoff times:
Source: @axios Read full article
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