The Daily Shot: 13-May-24
• The United States
• Canada
• The United Kingdom
• Europe
• Japan
• China
• Emerging Markets
• Commodities
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. Consumer sentiment deteriorated more than expected at the beginning of May, according to the latest U. Michigan survey.
Here are the contributions.
Source: @TheTerminal, Bloomberg Finance L.P.
• Households are increasingly concerned about higher unemployment ahead, which often serves as a leading indicator for the unemployment rate.
Source: Pantheon Macroeconomics
• Inflation expectations jumped with gasoline prices.
However, futures point to lower prices at the pump over the next few days.
Source: @TheTerminal, Bloomberg Finance L.P.
• Real household income expectations tumbled.
• Durables buying conditions are lower.
• Buying conditions for houses hit a record low.
– Homeowners haven’t been this upbeat on longer-term home price appreciation since 2007.
• Households reported a record high value of equity investments.
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2. Google search activity points to higher jobless claims ahead.
Source: Pantheon Macroeconomics
3. Households’ asset accumulation has broadly outpaced debt accumulation since the onset of the pandemic.
Source: IIF
• This chart shows the share of employees tapping their 401k accounts.
Source: Bank of America Institute
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4. The net boost to the federal budget from tax receipts in April was lower than expected but still exceeded last year’s level.
• Individual income taxes paid less refunds are running well above last year’s levels, …
Source: Oxford Economics
… boosted by higher stock prices.
Source: Oxford Economics
• Federal interest expenses continue to rise.
Source: Oxford Economics
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Canada
1. Canada’s April employment gains were well above forecasts.
Source: Reuters Read full article
• The unemployment rate held steady.
• The participation rate ticked higher.
• Wage growth eased but remains elevated.
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2. The probability of a BoC June rate cut dipped below 50% following the strong employment report.
• Bond yields climbed.
The loonie jumped but retreated shortly after.
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2. The Ivey PMI, which measures activity in both private and public organizations, has reached its highest level in two years.
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The United Kingdom
1. As we saw last week (chart), the Q1 GDP growth topped expectations, signaling the country’s exit from recession.
• Consumer spending was soft, …
… but business investment grew faster than expected.
• Weaker imports also boosted growth, …
… as the trade deficit narrowed.
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2. Production activity improved across the board in March.
• Manufacturing production:
• Services output:
• Construction output:
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3. Companies expect slower PPI and CPI growth ahead.
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Europe
1. Sweden’s economic activity improved in March.
– Industrial production:
– Services:
– Consumer spending:
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2. Norway’s CPI growth was higher than expected last month.
3. Here is a look at the EU’s vehicle trade with China.
Source: @DanielKral1, @OxfordEconomics
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Japan
1. Funds sharply reduced their bets against the yen after the BoJ’s interventions.
2. Flows into Japan-focused funds have accelerated.
Source: Goldman Sachs; @WallStJesus
3. Japan’s current account surplus in March was lower than expected but still reached a record high.
4. The Economy Watchers Survey Expectations index continues to fall.
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China
1. China’s credit growth slowed more than expected in April.
Net aggregate financing was negative, …
… as net government debt issuance declined.
Source: @markets Read full article
• The broad money supply growth continues to slow, while the narrow money supply growth was negative on a year-over-year basis.
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2. Inflation remains subdued.
Here is the PPI.
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3. The offshore yuan is weakening, with USD/CNH back at the 200-day moving average.
Source: @TheTerminal, Bloomberg Finance L.P.
4. Hong Kong-listed stocks are up almost 12% year-to-date.
Source: @TheTerminal, Bloomberg Finance L.P.
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Emerging Markets
1. Hedge funds have soured on the Brazilian real.
• Brazil’s inflation continues to moderate.
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2. Mexico’s manufacturing output increased again in March.
Source: MarketWatch Read full article
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3. EM inflation surprises remain mixed.
Source: TS Lombard
4. Here is a look at last week’s performance.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Hedge funds continue to boost their bets on copper.
2. Iron ore prices have sharply diverged from the rise in stocks at Chinese ports.
Source: Capital Economics
3. Wheat futures continue to rally.
4. Sugar prices have been under pressure, …
… with speculative accounts cutting their exposure.
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5. Orange juice prices are surging again.
6. Here is a look at last week’s performance.
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Equities
1. The S&P 500 earnings growth projections look strong.
Source: @markets Read full article
• Improved earnings per share expectations have been driven by stocks in the Nasdaq 100.
Source: Societe Generale Cross Asset Research; @AyeshaTariq
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2. Share buyback activity continues to strengthen.
Source: Yahoo Finance Read full article
3. Companies with low labor costs have been outperforming this month.
4. The GS sentiment index is back in “stretched” territory.
Source: Goldman Sachs; @MikeZaccardi
5. Options traders are betting on defensives.
Source: Deutsche Bank Research
6. Financial Twitter posts point to stronger retail flows ahead.
Source: JP Morgan Research; @WallStJesus
7. Here is a look at sector correlations to high-yield bond spreads and the ISM Manufacturing PMI.
Source: Capital Economics
8. This chart shows the historical performance of “Sell in May and go away.”
Source: Deutsche Bank Research
9. VIX and VVIX (vol of vol) indicators continue to decline.
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10. Here is a look at last week’s performance data.
• Sectors:
• Equity factors:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. Is rising unemployment signaling wider high-yield spreads?
Source: BofA Global Research
2. There was an uptick in ESG debt issuance early this year, largely driven by green bonds. (2 charts)
Source: IIF
Source: IIF
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3. Below is last week’s performance data across credit asset classes.
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Global Developments
1. Bank lending growth in mature markets remains muted, while EM has troughed.
Source: IIF
2. Here is a look at last week’s performance data.
• Currencies:
• Bond yields:
• Equities:
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Food for Thought
1. Price trends for natural and lab-grown diamonds:
Source: @chartrdaily
2. Record earnings in the live-music industry:
Source: Statista
3. Happiness score gains between 2010-2023:
Source: Visual Capitalist Read full article
4. Current and target active-duty military personnel by country:
Source: The Economist Read full article
5. Indebtedness to China:
Source: Visual Capitalist Read full article
6. Babies delivered by cesarean section:
Source: @axios Read full article
7. La Niña sets the stage for more and potentially stronger hurricanes to develop in the Atlantic.
Source: @axios Read full article
8. Global revenue of top media franchises:
Source: Visual Capitalist Read full article
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