The Daily Shot: 19-Aug-24
• The United States
• The United Kingdom
• Europe
• Japan
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. The U. Michigan’s sentiment indicator edged higher …
… due to improved sentiment among Democrats.
Source: @TheTerminal, Bloomberg Finance L.P.
Source: ABC News Read full article
• Here are the contributions to the headline index.
Source: @TheTerminal, Bloomberg Finance L.P.
• Buying conditions for durables remain soft.
• The expected and current financial situation indices have diverged.
• Inflation expectations were unchanged this month.
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2. Housing starts weakened in July, …
… particularly in the single-family construction sector.
Source: Reuters Read full article
• Building permits were above 2023 levels (2 charts).
• Below are the seasonally adjusted trends.
Source: @TheTerminal, Bloomberg Finance L.P.
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3. The Philly Fed’s regional manufacturing index unexpectedly declined this month.
• The July hiring spree is over.
• Fewer firms plan to raise prices.
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4. Hotel properties have been performing well, …
Source: Deutsche Bank Research
… but online search activity points to a pullback in travel.
Source: @business Read full article
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5. The US dollar has been under pressure amid expectations of Fed rate cuts in the months ahead.
• The market is still pricing 100 bps of rate cuts this year.
Source: @TheTerminal, Bloomberg Finance L.P.
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The United Kingdom
1. Retail sales were back above last year’s levels in July.
Source: RTT News Read full article
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2. Housing asking prices are holding above 2023 levels.
3. The BoE’s balance sheet remains significantly larger than it was before COVID.
Source: BoE Read full article
4. Unhappily married?
Source: @economics Read full article
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Europe
1. Euro-area trade surplus topped expectations.
Source: RTT News Read full article
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2. Swiss industrial output surged last quarter.
3. Here is a look at EU member GDP growth since the start of COVID.
Source: @DanielKral1, @OxfordEconomics
4. Finally, we have government budget allocations for R&D by sector and per capita.
Source: Eurostat Read full article
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Japan
1. Speculative accounts are now net long yen futures (for the first time since 2021).
2. Will a stronger yen halt the tourism boom?
Source: @JeffreyKleintop
3. Machinery orders improved in June.
4. BofA private clients have been exiting Japanese stocks.
Source: BofA Global Research
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China
1. Utilized foreign direct investment hit a multi-year low in July.
2. The renminbi could be a good hedge against US economic deterioration.
Source: Barclays Research
3. Stop releasing embarrassing data …
Source: @markets Read full article
4. China’s converts market has been under pressure.
Source: @markets Read full article
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Emerging Markets
1. Brazil’s economic activity accelerated in June.
Source: @economics Read full article
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2. Argentina’s government continues to run a surplus.
3. Malaysia’s and Thailand’s Q2 GDP reports came in slightly above expectations.
Source: Nikkei Asia Read full article
Source: @economics Read full article
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4. Romania’s Q2 GDP growth surprised to the downside.
5. South Africa’s retail sales accelerated in June.
6. Next, we have some data on last week’s performance.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Let’s begin with some updates on gold, which closed above $2,500 on Friday.
• Gold futures made a fresh all-time high with improving long-term momentum. (2 charts)
• Central banks have been buying a lot of gold.
Source: BofA Global Research; @dailychartbook
• Gold implied vol remains compressed by historical standards.
Source: Aazan Habib, Paradigm Capital
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2. Is the US grains rout nearing its end? (3 charts)
• Here is a look at China’s soybean inventories.
Source: @markets Read full article
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3. How did commodity markets perform last week?
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Energy
1. Brent crude continues to trade below $80/bbl.
Source: @TheTerminal, Bloomberg Finance L.P.
2. US natural gas inventories unexpectedly declined during the week of August 5th.
• Weekly changes:
• Inventory levels:
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Equities
1. Stocks had a good week.
2. Next, let’s take a look at some sentiment indicators.
• Deutsche Bank’s positioning index (a bounce):
Source: Deutsche Bank Research
• Goldman’s positioning indicator (lower):
Source: Goldman Sachs; @MikeZaccardi
• Speculative US equity futures positioning (still elevated):
Source: JP Morgan Research; @WallStJesus
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3. How does the stock market perform after the Jackson Hole meetings?
Source: @markets Read full article
4. How sensitive are different sectors to movements in long-term Treasury prices?
Source: BofA Global Research; @topdowncharts, @Callum_Thomas
5. Net EPS revisions have been less negative than the median historical trend.
Source: Goldman Sachs; @MikeZaccardi
6. The S&P 500 tech sector experienced a rapid rise in short-term breadth.
Source: SentimenTrader
7. The S&P has averaged a 2% intraday range over the past two weeks – the widest in over a year following a historically long streak of relatively calm conditions.
Source: SentimenTrader
8. Open interest in VIX puts has been elevated relative to calls as investors bet on lower volatility.
Source: @markets Read full article
9. The single-stock put-call ratio declined sharply last week.
10. Finally, we have some performance data from last week.
• Sectors:
• Equity factors:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. Last week saw strong gains in high-yield bonds.
2. BDC portfolio yields (primarily middle-market loans) are substantially higher than those of corporate high-yield bonds.
Source: @TheTerminal, Bloomberg Finance L.P.; h/t @theleadleft
3. Commercial real estate debt CLOs’ portfolios are seeing a higher distress rate.
Source: @WSJ Read full article
• This chart shows distress levels by sector.
Source: @WSJ Read full article
• Office visits have been improving:
Source: Placer.ai
Source: Placer.ai
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4. Cat bonds continue to outperform.
Source: @climate Read full article
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5. Here is a look at last week’s performance across key credit markets.
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Rates
1. Fund managers are overweight bonds.
Source: BofA Global Research
2. TIPS are declining as a share of funds’ bond assets.
Source: Goldman Sachs; @MikeZaccardi
3. Treasury interest rate volatility remains in a downtrend from last year’s high.
Source: Aazan Habib, Paradigm Capital
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Global Developments
1. Here is a look at market movements since the sell-off in risk assets. (2 charts)
Source: MRB Partners
Source: MRB Partners
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2. Geopolitical risks remain elevated.
Source: BlackRock Investment Institute
3. Next, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equities:
– Equity ETFs (equity performance in dollar terms):
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Food for Thought
1. Positive COVID tests:
Source: AP News Read full article
2. Alcohol consumption per person:
Source: Our World in Data
3. Clean energy technology investments across US districts since 2021:
Source: @liamdenning, @EnergyCredit1, @opinion Read full article
4. Trends in law enforcement officer numbers:
Source: The New York Times Read full article
5. US labor force participation rate among young college graduates:
Source: @BW Read full article
6. Audience reach concentration among the top 1,000 podcasts:
Source: @WSJ Read full article
7. Lunar landings:
Source: @WSJ Read full article
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