The Daily Shot: 29-Apr-24
• The United States
• The Eurozone
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. Last month’s real consumer spending topped expectations, marking the largest monthly gain in over a year.
Here are the spending trends for goods and services.
Source: @TheTerminal, Bloomberg Finance L.P.
• Real household incomes increased in March.
• Consumer saving keeps trending lower.
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2. The Atlanta Fed’s GDPNow model opened its Q2 growth estimate at nearly 4% annualized, reflecting robust consumer strength.
Source: Federal Reserve Bank of Atlanta
3. Monthly PCE inflation data indicate that core inflation continues to run hot.
Source: @economics Read full article
Here is the supercore PCE index.
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4. The updated April U. Michigan report confirmed a pullback in consumer confidence this month.
Short-term inflation ex[pectetiosn increased with gasoline prices.
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5. The Fed’s next set of policy decisions will have a massive impact on the federal government’s interest expenses.
Source: BofA Global Research
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The Eurozone
1. The rebound in French consumer sentiment appears to be stalling.
2. Spain’s retail sales declined in March.
3. Euro-area loan growth remains soft.
However, the board money supply shows signs of a rebound.
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4. Longer-term consumer inflation expectations are holding steady (2nd panel).
• Key inflation measures have converged with market-based longer-term inflation expectations (blue).
Source: @JeffreyKleintop
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5. Hedge funds have turned bearish on the euro (vs. USD).
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Europe
1. Norway’s retail sales are holding at pre-COVID levels.
2. Speculative accounts (such as hedge funds) have rapidly shifted from betting on the British pound to positioning against it.
3. Speculators are boosting their bets against the Swiss franc.
4. Here is a look at the EU’s renewables output.
Source: ING
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Asia-Pacific
1. The yen was caught in a short squeeze this morning. After reaching 160, the dollar-yen rate plummeted toward 155, …
… unraveling the overextended short-yen positions and carry trades that use the yen as a funding currency.
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2. Singapore registered a sharp decline in industrial production in March.
3. New Zealand’s consumer confidence is deteriorating again.
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China
1. The Shanghai Shenzhen CSI 300 Index broke above resistance at its 200-day moving average, …
Source: @TheTerminal, Bloomberg Finance L.P.
… as foreign capital flows back.
Source: @markets Read full article
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2. Bond yields are rebounding.
3. China’s firms continue to rely on short-term financing.
Source: BCA Research
4. Here are the numbers of companies (categorized by country of origin) that maintain regional headquarters in Hong Kong.
Source: Semafor
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Emerging Markets
1. Let’s begin with Mexico.
• The trade surplus surged as imports softened in March.
• The unemployment rate hit a multi-decade low.
• Economists are beginning to lower their growth forecasts for Mexico’s economy in 2024.
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2. Thailand’s exports deteriorated in March.
3. Here is a look at the credit rating impact on refinancing costs for emerging markets.
Source: IMF
4. The EM tech sector has held up over the past two months relative to DM, possibly aided by less extreme valuations.
Source: @BBGIntelligence
5. Next, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Gold prices continue to outpace gold ETFs’ holdings.
Source: @TheTerminal, Bloomberg Finance L.P.
• The gold options market is showing little exuberance.
Source: UBS Research; @WallStJesus
• Speculative accounts are boosting their bets on silver.
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2. Hedge funds are very bullish on copper.
3. Speculators are becoming less confident in cocoa’s unprecedented rally.
4. US wheat futures continue to rebound.
5. Here is a look at last week’s performance data.
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Energy
1. Hedge funds are becoming more cautious on crude oil.
Source: @markets Read full article
2. Here is a look at trends in global energy investment.
Source: PIIE Read full article
3. This chart shows Russia’s natural gas exports in 2021 (before the war) and in 2023.
Source: @WSJ Read full article
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Equities
1. Let’s begin with some technical charts.
• The S&P 500 is about to test its 50-day moving average.
The mid-cap index is also testing resistance at the 50-day moving average.
• The S&P 500 held support at its 20-week moving average, although upside momentum is fading.
• Financials are holding support relative to the S&P 500.
– Typically, an oversold bounce for the S&P 500 within the context of favorable trends has been supportive for the financial sector.
Source: SentimenTrader
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2. CTAs remain upbeat on stocks.
Source: Deutsche Bank Research
• Insider activity is also bullish.
Source: Barron’s
• Reddit comments signal bullish sentiment, with pump-and-dump schemes actively in play. Retail investors, however, are showing much less enthusiasm.
Source: JP Morgan Research; @WallStJesus
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3. Companies that missed estimates were punished more than usual in this earnings season.
Source: BofA Global Research
4. Momentum is currently exposed to strong economic growth and high interest rates. The risk of a momentum reversal should remain low in the absence of a significant macro shift or geopolitical shock, according to BlackRock.
Source: BlackRock Investment Institute
5. The market continues to ignore melting 2024 Fed rate cut expectations.
6. Next, we have some performance data from last week.
• Sectors:
• Equity factors:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• The biggest US tech stocks:
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Credit
1. High-yield new-issue volume declined last week amid rising rates.
Source: PitchBook
• Leveraged loan issuance backing dividend recaps has expanded at a record pace. PE shops with aging portfolios are extracting cash from portfolio companies for dividend payouts, while tighter credit spreads have made these transactions more attractive to sponsors, according to PitchBook
Source: PitchBook
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2. Private credit ratings activity improved in Q1.
Source: PitchBook
• Institutions continue to report underallocation in private debt.
Source: @theleadleft
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3. US banks have large allowances for loan losses, which could reduce the need for additional provisioning expenses.
Source: MRB Partners
4. This chart shows last week’s performance data.
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Global Developments
1. The dollar has appreciated against other safe-haven currencies this year, boosted by favorable growth and interest rate differentials. (2 charts)
Source: @opinion Read full article
Source: @opinion Read full article
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2. More country indicators are showing an uptick in global exports.
Source: MRB Partners
3. Some estimates suggest a more gradual easing cycle than markets expect, especially in the US.
Source: Coolabah Capital Read full article
4. Here is a look at sources of tax revenue across OECD countries.
Source: Tax Foundation Read full article
5. Finally, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equities:
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Food for Thought
1. Price trends for select grocery items in the US:
Source: @WSJ Read full article
2. Rising popularity of chicken chains:
Source: Placer.ai
3. Rainy day savings:
Source: Bank of America Institute
4. US consumer spending by age:
Source: Bank of America Institute
5. Missile and drone strike interceptions in conflict zones:
Source: @financialtimes Read full article
6. China’s dominance of clean-tech supply chains:
Source: @economics Read full article
7. US coffee consumption trend:
Source: @axios Read full article
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