Median asking rent remains below last year’s levels

The Daily Shot: 21-Aug-24
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought

The United States

1. The Philly Fed’s regional services index indicated weakening business activity in August, …

… with firms accelerating staff reductions.

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2. Next, let’s take a look at some inflation trends.

• Estimates show slower core PCE inflation gains in July (2 charts).

Source: Pantheon Macroeconomics

Source: Oxford Economics

• The median asking rent remains below last year’s levels.

Source: realtor.com

• Disinflation in the structural components of the CPI has been slow to materialize.

Source: Simon White, Bloomberg Markets Live Blog

• Wage growth via online job postings has moderated.

Source: BlackRock Investment Institute Read full article

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3. Here are some updates on the US consumer.

• Auto loan delinquencies are rising.

Source: Goldman Sachs; @MikeZaccardi

• Consumption has been robust.

Source: JP Morgan Research; @carlquintanilla

• Household wealth and disposable income continue to rise while the savings rate slows.

Source: SOM Macro Strategies

– Savings growth has been concentrated in the highest-income cohort.

Source: SOM Macro Strategies

– This chart shows the share of consumption and income by income quartile.

Source: SOM Macro Strategies

– Here is the share of consumption and net wealth by income quintile over time.

Source: BofA Global Research; @MikeZaccardi

– Finally, we have US household net worth by age.

Source: Goldman Sachs; @MikeZaccardi

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4. Despite depressed consumer sentiment, air travel is at record highs.

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Canada

1. Inflation slowed further in July.

Source: Reuters Read full article

• Here are the contributions to the year-over-year changes in the CPI.

Source: @TheTerminal, Bloomberg Finance L.P.

• Core inflation measures continue to moderate.

• Housing inflation eased last month but remains elevated.

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2. Bond yields declined in response to the CPI report.

• The market is pricing at least three BoC rate cuts before the end of the year.

Source: @TheTerminal, Bloomberg Finance L.P.

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3. Last month’s housing starts topped expectations.

Source: Reuters Read full article

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The United Kingdom

1. Historically, 10-year gilts have traded in a narrow range before declining one month into a rate-cutting cycle, although there is a wide range of outcomes. (2 charts)

Source: Nomura Securities

Source: Nomura Securities

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2. Household income growth has been slowing.

Source: IFS Read full article

3. Here is a look at political party preferences by age.

Source: @financialtimes Read full article

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The Eurozone

1. Construction output climbed in June.

Source: ShareCast Read full article

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2. The euro-area current account surplus hit a record high.

3. Here are the contributions to the euro-area CPI.

Source: @TheTerminal, Bloomberg Finance L.P.

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Europe

1. Sweden’s central bank delivered another rate cut.

Source: @financialtimes Read full article

– This chart shows policy rate projections from Capital Economics (CE).

Source: Capital Economics

• The krona has been strengthening.

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2. Next, we have the proposed tariffs on Chinese-made EVs by company.

Source: @bpolitics Read full article

Source: Reuters Read full article

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3. Here is the EU population pyramid for 2020 and 2050.

Source: IMF Read full article

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Japan

1. Exports reached a record high in July, with the yen’s weakness amplifying the increase.

Source: @economics Read full article

• These charts show the contributions to export growth by destination and product.

Source: Pantheon Macroeconomics

• The trade deficit was wider than expected.

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2. Tokyo condo sales hit a multi-year low.

3. Foreign investors sold Japan’s stock futures but bought cash equities earlier this month.

Source: @markets Read full article

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Asia-Pacific

1. Taiwan’s export orders strengthened more than expected last month.

2. South Korea’s exports are holding up well this month.

Here are the contributions to export growth by destination and product.

Source: Pantheon Macroeconomics

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Emerging Markets

1. Mexico’s retail sales sputtered in June.

The weak retail sales report pushed the peso lower.

Source: FXS Read full article

• Mexico’s FX reserves are at a record high.

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2. Brazil’s Ibovespa Index has gone roughly 225 days without falling more than 2%.

Source: Eleven Financial Research

3. The Turkish lira continues to sink.

4. Earnings sentiment in emerging markets has lagged behind advanced economies.

Source: Goldman Sachs; @WallStJesus

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Commodities

1. Gold continues to rally, …

… amid US dollar weakness.

• The gold price has further diverged from US real rates.

Source: @TheTerminal, Bloomberg Finance L.P.

• Gold miners’ shares have been outperforming gold in recent days.

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2. Global steel production appears to have peaked for now.

Source: @JavierBlas, @opinion Read full article

3. Dry conditions in Brazil have driven up coffee prices, as the potential for premature flowering and reduced yields threatens the country’s coffee crop. The recent strengthening in the Brazilian real also boosted prices.

4. Sugar futures remain under pressure due to optimism that above-average monsoon rains in India will lead to a bumper sugar crop.

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Energy

1. Crude oil prices retreated further on Tuesday.

Source: @TheTerminal, Bloomberg Finance L.P.

Source: Reuters Read full article

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2. Uranium prices have been rolling over amid increased production.

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Equities

1. Market breadth has been improving.

Source: @_JoshSchafer, @KevRGordon Read full article

2. Global share buybacks have surged in recent years, nearly equaling dividend payouts.

Source: Janus Henderson Read full article

• Just ten companies, nine of which are in the US, accounted for almost a quarter of 2022’s buybacks, according to Janus Henderson.

Source: Janus Henderson Read full article

• BofA’s corporate clients accelerated share buybacks this year.

Source: BofA Global Research; @dailychartbook

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3. Large-cap mutual funds have been underperforming due to their underallocation to tech mega-cap shares (2 charts).

Source: Goldman Sachs; @MikeZaccardi

Source: Goldman Sachs; @MikeZaccardi

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4. The rebound in S&P 500 earnings sentiment has been outpacing that of international markets.

Source: Goldman Sachs; @WallStJesus

5. Companies focused on onshoring/reshoring have almost given up this year’s outperformance.

6. The VanEck Morningstar Wide Moat ETF (see definition) held long-term support relative to the S&P 500 after reaching oversold levels.

7. The ISEE’s adjusted call/put ratio indicates increasingly bullish sentiment.

Source: ISEE Sentiment Index Further reading

8. Nearly half of all ETF launches in the past six months sit in the derivative category, such as covered calls, buffers, and single-stock leverage products. (2 charts)

Source: @Todd_Sohn

Source: @Todd_Sohn

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Credit

1. Private credit default rates remain “well-behaved.”

Source: @markets Read full article

2. Here is a look at vulnerable retail sectors.

Source: S&P Global Market Intelligence

3. ESG bond sales hit a five-year low in 2024.

Source: @markets Read full article

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Rates

1. 4% is a key level for the long-bond yield.

2. Oxford Economics expects the yield curve slope (2yr/10yr) to fully shift into positive territory by the first quarter of 2025.

Source: Oxford Economics

• Here is the market pricing for the Treasury curve 3, 6, and 12 months out.

Source: @TheTerminal, Bloomberg Finance L.P.

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3. The Quadratic Interest Rate Vol and Inflation Hedge ETF (see overview) registered a significant improvement in long-term momentum, indicating that the downtrend from 2021 has matured.

4. Fund managers view global monetary policy as extremely restrictive.

Source: BofA Global Research

• The market also sees the Fed’s policy as increasingly restrictive.

Source: @TheTerminal, Bloomberg Finance L.P.

5. Below is the distribution of global government debt by country.

Source: BofA Global Research

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Global Developments

1. Here is a look at total debt levels in select economies as a percent of GDP.

Source: BofA Global Research

2. There has been an upturn in global liquidity.

Source: CrossBorder Capital

3. Secondhand watch prices continue to sink.

Source: WatchEnthusiasts

Nonetheless, Swiss watch exports remain robust.

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Food for Thought

1. Capital spending by the largest tech firms:

Source: @WSJ Read full article

2. Data storage supply and demand:

Source: EPRI Read full article

3. Evolution of electricity generation sources in the US:

Source: The New York Times Read full article

4. Gender parity and salary distribution among US college graduates:

Source: @BW Read full article

5. Will RFK drop out of the presidential race? Here is the probability according to betting markets.

Source: Polymarket
Source: Newsweek Read full article

• The 2024 presidential election probabilities in the betting markets:

Source: Polymarket

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6. Cigarette sales rates:

Source: Our World in Data

7. Interest in getting a pool:

Source: @chartrdaily

• Pool installations:

Source: @chartrdaily

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