The Daily Shot: 18-Apr-24
• The United States
• The United Kingdom
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Rates
• Global Developments
• Food for Thought
The United States
1. The Fed’s latest Beige Book report indicates that US economic activity has picked up. Below is the Oxford Economics Beige Book Activity Index.
Source: Oxford Economics
• The report showed a decrease in interest-rate-related commentary.
• There was more discussion of the housing markets.
• Commercial real estate concerns appear to have eased.
• Inflation concerns persist.
Source: Oxford Economics
Source: MarketWatch Read full article
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2. Next, we have some updates on the housing market.
• Mortgage applications remain well below last year’s levels.
Here is the rate lock count.
Source: AEI Housing Center
• Delinquencies on FHA loans due to unemployment are increasing.
Source: Quill Intelligence
• The number of housing units authorized but not yet started remains high, particularly in the multifamily sector
Source: Arcano Economics
• Builders are increasingly constructing single-family homes intended for rental purposes.
Source: Apartment List
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3. The slump in the annual growth rate of temporary employment suggests permanent employment growth may weaken.
Source: Capital Economics
4. Cyclical pressures have been driving inflation.
Source: MRB Partners
5. The share of equities and real estate held by those over 55 years old is at record levels and has significantly diverged from younger cohorts. (2 charts)
Source: Deutsche Bank Research
Source: Deutsche Bank Research
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The United Kingdom
1. The UK CPI figures for March were a bit higher than anticipated.
Source: @TheTerminal, Bloomberg Finance L.P.
Source: CNBC Read full article
• Here is the core CPI.
• Goods inflation continues to moderate.
But services CPI remains sticky, as rent inflation surges.
• Below is the retail price index.
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2. The official index of house prices showed almost no change year over year in February as the housing market strengthened.
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Europe
1. The monthly CPI increase in the Eurozone received a substantial boost from higher clothing prices. The second panel shows the contributions to the year-over-year CPI changes.
Source: @TheTerminal, Bloomberg Finance L.P.
2. Here is a look at labor costs across the EU.
Source: Eurostat Read full article
3. What are the main causes of death in the EU?
Source: Eurostat Read full article
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Asia-Pacific
1. Japan’s services sector output surged in February, …
… with PMI data continuing to indicate robust activity in the nation’s services sector.
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2. Australia’s employment contracted in March, but full-time employment gained for the third month in a row.
Source: @WSJ Read full article
• The unemployment rate remains very low.
• The labor force participation rate edged lower.
• Here is the Beveridge curve.
Source: Capital Economics
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China
1. Bond yields continue to sink.
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2. The share of SWIFT payments made in yuan is nearing 5%.
3. China’s IPO activity has collapsed.
Source: Reuters Read full article
4. Industrial product demand and capacity utilization have been weakening.
Source: Deutsche Bank Research
5. With domestic demand remaining relatively soft, China’s economy continues to rely on government investment and exports.
Source: Capital Economics
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Emerging Markets
1. Brazil’s economic activity kept strengthening in February.
Source: TradingView Read full article
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2. Inflation in South Africa declined slightly in March, …
… while retail sales experienced a modest increase.
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4. Here is a look at EM currencies’ performance since April 10th (US CPI report).
Source: Capital Economics
5. Numera Analytics expects EM stocks to outperform DM stocks 12 months out, mainly due to differences in terms of trade as commodity prices gain momentum.
Source: Numera Analytics (@NumeraAnalytics)
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Cryptocurrency
1. Cryptos are down substantially over the past few days.
2. Bitcoin is tetsting support at $60k.
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Commodities
1. Iron ore futures are rebounding.
• China’s steel prices are also climbing.
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2. Coffee futures in New York and London are surging.
3. US cotton futures have given up most of their 2024 gains.
4. The slump in US wheat prices persists.
Source: Reuters Read full article
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Energy
Crude oil prices declined on Wednesday as traders unwound some of the geopolitical risk premium, …
Source: CNBC Read full article
… while US stockpiles continue to grow.
Source: BNN Read full article
– Weekly US inventory changes:
– Inventory levels:
– US gasoline days of supply:
• US gasoline demand has softened in recent weeks.
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Equities
1. The average S&P 500 stock (equal weight index) has been down for five days in a row.
• The average stock’s 5-day drawdown has been substantial. Small caps also took a significant hit (2nd panel)
• The S&P 500 Equal Weight Index is nearing oversold territory.
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2. The percentage of S&P 500 members trading above their 20-day moving average has fallen below 10%, a level typically followed by a bounce, though not necessarily a sustained one.
3. The S&P 500 is almost 2% below its 50-day moving average.
4. The AAII bull-bear spread (retail investor sentiment) dropped this week but remains in positive territory.
5. The put/call ratio surged this week.
6. The S&P 500 implied correlation is starting to rise as volatility returns.
Source: Aazan Habib, Paradigm Capital
7. Unlike the average stock in the S&P 500, tech shares are no longer correlated with Treasuries.
8. The gap between S&P 500 valuations and real rates keeps widening.
Source: @TheTerminal, Bloomberg Finance L.P.
9. Mutual fund families that offer ETFs have seen more inflows than fund families that do not offer ETFs.
Source: @BBGIntelligence
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Rates
1. Foreigners bought almost $90 billion of coupon Treasuries in February.
2. Fund managers have been unloading their bond holdings.
Source: BofA Global Research
3. Some traders are betting that the economy and inflation will weaken significantly in the months ahead, forcing the Fed to deliver three rate cuts.
Source: @markets Read full article
4. The US Treasury’s cash holdings at the Fed hit the highest level in two years, which will put downward pressure on reserves (reducing liquidity in the private sector).
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Global Developments
1. Global inflation is much stickier than in the past.
Source: MRB Partners
2. Major central banks continue to shrink their balance sheets.
Source: Arcano Economics
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Food for Thought
1. Wage growth comparison of 1979-2019 and 2019-2023 periods:
Source: EPI Read full article
2. US military’s R&D expenditure by department:
Source: Semafor
3. Americans planning to vacation abroad:
4. Home insurance rates:
Source: Insurify
5. Population projections for select countries:
Source: Visual Capitalist Read full article
6. Children’s sports participation rates:
Source: USAFacts
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