US import prices jumped last month

The Daily Shot: 17-May-24
The United States
The Eurozone
Europe
Asia-Pacific
China
Emerging Markets
Cryptocurrency
Commodities
Energy
Equities
Rates
Global Developments
Food for Thought



 

The United States

1. US manufacturing output unexpectedly declined last month, …
 

 
… as vehicle production slowed.
 

 
Source: @economics   Read full article  
 
Manufacturing capacity utilization has been trending lower.
 

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2. The Philly Fed’s regional manufacturing index experienced a pullback this month as new orders dipped back into contraction territory.
 

 
But manufacturers are more optimistic about future activity, …
 
Source: Federal Reserve Bank of Philadelphia   Read full article  
 
… expecting stronger demand in the months ahead.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
The region’s factories increasingly plan to boost hiring.
 

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3. Initial jobless claims declined after a “one-off” spike two weeks ago.
 

 
Continuing claims are running well above the levels we saw in recent years (excluding the pandemic shock).
 

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4. The Citi Economic Surprise Index continues to sink.
 

 
5. US financial conditions have eased substantially this year.
 

 
6. Next, we have some updates on inflation.
 
Import prices jumped last month, potentially putting upward pressure on the core goods CPI.
 

 
Companies are becoming more cautious about price increases as consumers turn more selective.
 
Source: Goldman Sachs; @MikeZaccardi  
 
However, many firms are still able to defend their margins, which could keep inflation elevated.
 
Source: Simon White, Bloomberg Markets Live Blog  
 
The PPI and CPI data signal a slower core PCE increase in April (2 charts).
 
Source: Oxford Economics  
 
Source: Nomura Securities  
 
Will the headline CPI begin rising on a year-over-year basis later this year?
 
Source: BofA Global Research  

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7. Mortgage applications remain well below last year’s levels.
 

 
But lower mortgage rates could boost housing demand.
 
Source: Mortgage News Daily  


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The Eurozone

1. The ECB will be selling a lot of bonds in the coming years.
 
Source: @davidjpowell24, @economics   Read full article  
 
2. Here is a look at budget balance forecasts for next year.
 
Source: @economics   Read full article  
 
3. The euro-area Citi Economic Surprise Index is outperforming the US equivalent.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
4. The US has been growing faster than the euro area for some time now.
 
Source: Commerzbank Research  
 
R&D spending as a share of GDP is much higher in the US and Germany than in the rest of the euro area.
 
Source: Commerzbank Research  


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Europe

1. Norway’s multi-year upward GDP trend remains intact.
 

 
2. Poland’s core inflation continues to ease.
 

 
3. Container freight costs from Asia are climbing again.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
4. Here are the top five EU countries by employment and enterprises in the publishing sector.
 
Source: Eurostat   Read full article  


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Asia-Pacific

1. The BoJ has made hefty profits on its equity ETF holdings.
 
Source: @financialtimes   Read full article  
 
2. South Korea’s labor market remains tight, which is keeping the central bank from lowering rates.
 
The unemployment rate:
 

 
Employment-to-population ratio:
 


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China

1. Industrial production surprised to the upside.
 

 
2. Retail sales growth has been relatively soft.
 

 
3. The property market continues to struggle.
 
Home price appreciation:
 

 
Monthly real estate investment relative to the average of recent years:
 

 
Monthly residential property sales relative to the average of recent years:
 

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4. Hong Kong-listed stocks continue to widen their outperformance vs. mainland shares.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
5. Spreads on dollar-denominated high-yield bonds have been tightening.
 


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Emerging Markets

1. Let’s begin with South Africa.
 
Retail sales improved again in March.
 

 
Mining output deteriorated.
 

 
The unemployment rate jumped last quarter.
 

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2. Nigeria’s CPI continues to rise.
 

 
3. Romania’s industrial production surged in March.
 

 
Inflation has been easing.
 

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4. Foreign investors bought a lot of Turkish bonds recently.
 
Source: @markets   Read full article  


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Cryptocurrency

1. It has been a good week for cryptos with Bitcoin outperforming top peers.
 
Source: FinViz  
 
2. There was an uptick in short liquidations as BTC returned above $63K.
 
Source: Coinglass  
 
3. Bitcoin’s price has been aligned with market expectations on US interest rates.
 
Source: CoinShares  
 
4. Bitcoin’s trading volume recently dipped.
 
Source: CoinShares  
 
5. The US continues to lose market share in BTC and ETH spot volumes.
 
Source: CoinShares  


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Commodities

1. Nickel prices continue to rebound.
 

 
The metal is at its initial resistance, although momentum is improving.
 
Source: Aazan Habib, Paradigm Capital  

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2. Here is the LME’s industrial metals index.
 

 
3. The cocoa bubble keeps deflating.
 


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Energy

1. Natural gas futures keep surging, …
 

 
… as US gas in storage rises slower than expected.
 

 

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2. Here is a look at Canada’s oil and gas greenhouse gas emissions.
 
Source: @financialtimes   Read full article  


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Equities

1. The Dow crossed 40k for the first time on Thursday. Here are the contributions to its gains since reaching the 30k level.
 
Source: @WSJ   Read full article  
 
2. What happens to the S&P 500 after it hits an all-time high?
 
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital  
 
3. Companies with relatively low labor costs have outperformed this month.
 

 
4. This chart shows the S&P 500 earnings growth with and without the Magnificent 7 stocks.
 
Source: JP Morgan Research; @WallStJesus  
 
5. One measure of market frothiness is the ratio of the S&P 500 forward P/E ratio to VIX.
 

 
6. Tech funds are seeing some outflows.
 
Source: BofA Global Research  
 
7. Utilities and infrastructure funds are seeing inflows as these sectors have outperformed the S&P 500 year-to-date.
 
Utilities:
 
Source: BofA Global Research  
 

 
Infrastructure:
 
Source: BofA Global Research  
 

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8. Inverse VIX ETFs have seen massive inflows over the past 12 months as retail investors ride the theta decay (a scary trend).
 


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Rates

1. The 30-year Treasury yield is holding support at the 200-day moving average.
 
Source: @TheTerminal, Bloomberg Finance L.P.  
 
Here is a look at the 30-year Treasury’s annual returns.
 
Source: BofA Global Research  

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2. Private foreign investors have been boosting their holdings of Treasuries.
 
Source: @markets   Read full article  
 
Conversely, China has been rapidly cutting Treasury holdings.
 
Source: @markets   Read full article  

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3. TIPS funds are seeing rapid outflows again.
 
Source: BofA Global Research  


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Global Developments

1. Central banks’ balance sheets continue to shrink (in US dollar terms).
 
Source: Arcano Economics  
 
2. US inflation has deviated on the upside versus expectations, while Europe has broadly been in line with forecasts from October 2022.
 
Source: Deutsche Bank Research  
 
3. There has been a structural decline in working-age populations.
 
Source: TS Lombard  


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Food for Thought

1. Labor force participation among older Americans:
 
Source: Deutsche Bank Research  
 
2. US birth rates by age group and ethnicity:
 
Source: @WSJ   Read full article  
 
3. Income distribution among the top 10 percent and 1 percent in selected countries:
 
Source: @WSJ   Read full article  
 
4. Property insurance payment growth:
 
Source: Bank of America Institute  
 
5. The World Press Freedom Index:
 
Source: Statista  
 
6. Carbon emitted by major travel methods:
 
Source: Visual Capitalist   Read full article  
 
7. Support for mass deportations of undocumented immigrants:
 
Source: @axios   Read full article  
 
8. Different sizes of mattresses:
 
Source: BuzzFeed  
 

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Have a great weekend!


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