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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