The Daily Shot: 16-Aug-24
• The United States
• Canada
• The United Kingdom
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. As projected by Barclays Research (see chart from yesterday), US retail sales in July exceeded expectations, easing recession concerns.
Source: CNBC Read full article
• Vehicle sales rebounded after the June cyberattack on CDK Global, which had paralyzed US and Canadian car dealerships (2 charts).
• Here is a look at nominal and real retail sales levels.
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2. Stocks jumped in response to the robust retail sales report, …
… with comments from Walmart further supporting the resilience of retail sales.
Source: Reuters Read full article
• Bond yields climbed, …
… as the market trimmed the chance of 50 basis point rate cuts.
• The US dollar gained.
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3. Factory output declined in July, …
… as vehicle production dropped due to Hurricane Beryl.
Source: @economics Read full article
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4. Initial jobless claims remained below 2023 levels last week.
• Here are the continuing jobless claims.
• This chart shows the seasonally adjusted jobless claims indices.
Source: @TheTerminal, Bloomberg Finance L.P.
• Next, we have the percentage of states with significant annual increases in jobless claims.
Source: Simon White, Bloomberg Markets Live Blog
• Separately, fewer firms have been discussing layoffs on earnings calls.
Source: Goldman Sachs; @MikeZaccardi
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5. Homebuilder sentiment declined further this month.
Source: NAHB Read full article
By the way, lumber prices have been rebounding over the past few weeks.
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6. US import prices increased slightly more than expected in July.
7. US freight shipments appear to be stabilizing.
Source: Cass Information Systems
Shipping rate deflation has been moderating.
Source: Cass Information Systems
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Canada
1. Building permits tumbled in June.
• Existing home sales declined last month.
• Toronto condo investors have been losing money.
Source: @wealth Read full article
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2. Oxford Economics expects potential GDP growth to average 2.1% this decade.
Source: Oxford Economics
A sharper fall in inflation could be the most prominent upside risk to GDP growth.
Source: Oxford Economics
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The United Kingdom
1. The UK economy continued to expand in the second quarter, with growth aligning with forecasts.
• However, private domestic demand was soft.
But robust government spending gave the economy a boost.
• The monthly (production-based) GDP indicator was flat in June.
– Factory output jumped.
– Construction activity also strengthened.
– But services output registered its first decline in months.
– Here are the 3-month GDP changes.
Source: Pantheon Macroeconomics
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2. The trade deficit was wider than expected in June.
3. Productivity declined again in the second quarter.
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Europe
1. Sweden’s inflation was firmer than expected last month.
Source: @economics Read full article
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2. Poland’s Q2 GDP growth topped expectations.
3. The Swiss GDP growth was also a bit stronger than expected.
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Asia-Pacific
1. Should we expect more yen strength ahead, based on the 1998 analog?
Source: MUFG Securities; @WallStJesus
2. The RBA expressed a willingness to be patient with rate cuts as inflation remains above target.
Source: @economics Read full article
Source: @economics Read full article
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China
1. Infrastructure investment has been soft.
Source: @economics Read full article
2. Real retail sales remain below trend.
Source: Morgan Stanley Research
• Household spending growth is also below its long-term average.
Source: Morgan Stanley Research
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3. Here is the evolution of CPI projections.
Source: BofA Global Research
4. Is China exporting disinflation?
Source: @ShanghaiMacro
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Emerging Markets
1. Brazil’s retail sales declined in June.
2. Argentina’s inflation has begun to ease but remains in hyperinflation territory.
3. Indonesia’s trade surplus narrowed sharply last month amid strong imports.
4. Vietnam is a source of relatively cheap IT talent, which is attracting overseas chipmakers. (2 charts)
Source: Nikkei Asia Read full article
Source: Nikkei Asia Read full article
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5. Core inflation has been declining across major EMs.
Source: TS Lombard
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Cryptocurrency
1. Litecoin (LTC) outperformed major crypto peers over the past week while Bitcoin and Bitcoin Cash (BCH) lagged.
Source: FinViz
2. The BTC/Gold price ratio experienced a sharp drop during the recent risk-off environment.
Source: @KaikoData
3. Bitcoin liquidity is increasingly concentrated during the weekdays, especially in USD markets.
Source: @KaikoData
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Commodities
1. Brazil now dominates soybean exports to China.
Source: @SusanNOBULL Read full article
2. Orange juice futures broke above a short-term consolidation.
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Energy
1. NYMEX natural gas is approaching a seasonal low in September.
Source: Aazan Habib, Paradigm Capital
So far, there is a persistent downtrend in price that is far below average levels.
• The LNG market is headed for a deep surplus.
Source: ING
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2. Demand for crude oil call options remains elevated.
Source: @markets Read full article
3. US gasoline futures point to lower prices at the pump.
Source: @TheTerminal, Bloomberg Finance L.P.
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Equities
1. The S&P 500 is now only 2.2% below its all-time high.
2. The Nasdaq 100 and the Russell 2000 closed above their 50-day moving averages.
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3. Investment managers have sharply reduced their exposure to stocks in recent weeks.
Source: NAAIM
4. Foreigners bought almost $100 billion of US equities in June.
5. Here is a look at passive vs. active cumulative fund flows since 2008.
Source: BofA Global Research
6. S&P 500 at 6,000 by year-end?
Source: CNBC Read full article
The options market assigns a 19% probability to such an outcome.
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8. Implied volatility indicators have declined sharply, with VIX nearing 15.
• The VIX curve is back in contango.
• Lower volatility should bring vol-control funds back into the market.
Source: @markets Read full article
Source: Deutsche Bank Research
• What is the options market telling us about the probability of the VIX climbing above 20 around the US elections this fall?
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Credit
1. VIX points to more credit spread tightening ahead.
Source: @TheTerminal, Bloomberg Finance L.P.
2. US investment-grade new-issue concessions ticked higher but are not at stressed levels.
Source: Morgan Stanley Research
3. ABS issuance has been robust this year.
Source: Deutsche Bank Research
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Rates
1. Foreigners slowed their purchases of coupon Treasuries in June.
2. BofA private clients continue to extend their debt portfolio duration.
Source: BofA Global Research
3. This chart shows ownership of government debt by country.
Source: BofA Global Research
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Global Developments
1. Here is a look at household debt-to-income ratios in advanced economies.
Source: Torsten Slok, Apollo
2. Next, we have housing spending from recent peak levels by select DM countries.
Source: TS Lombard
3. The value of global bond markets reached $130 trillion this year.
Source: BofA Global Research
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Food for Thought
1. Electric range improvement in plug-in hybrids across different markets:
Source: BloombergNEF Read full article
2. Electricity consumption per request for various AI platforms:
Source: EPRI Read full article
3. Projected share of state electricity consumption by data centers:
Source: EPRI Read full article
4. Preferred methods to keep in touch with friends and family:
Source: @CivicScience Read full article
5. Growth in GDP per capita in swing states:
Source: @bbgvisualdata Read full article
6. Discrepancy between health spending and medical coverage in major economies:
Source: Statista
7. The longest trail across the US (in progress):
Source: Rails-to-Trails Conservancy Read full article
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Have a great weekend!
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