The Daily Shot: 30-Aug-24
• The United States
• Canada
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Equities
• Rates
• Food for Thought
The United States
1. Second-quarter GDP growth was revised upward, with stronger consumer spending offsetting downward revisions in other components.
Here are the updated contributions to growth rates in consumer spending and GDP.
• The GDI measure continues to lag GDP.
• Corporate profits hit a record high.
• The third-quarter nowcast indicators are converging near 2% growth (annualized).
Source: Bloomberg Economics, @TheTerminal, Bloomberg Finance L.P.
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2. Initial jobless claims appear to be stable for now.
Here is the seasonally adjusted index.
Source: @TheTerminal, Bloomberg Finance L.P.
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3. Dollar General’s results highlight the financial strain faced by lower-income consumers.
Source: @business Read full article
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4. Next, we have some updates on the housing market.
• Pending home sales in July remained below last year’s levels, …
… and the Redfin indicator suggests no improvement in August.
Source: Redfin
– The seasonally adjusted index of pending home sales hit a record low.
Source: Reuters Read full article
• Redfin’s indicator of homebuyer demand remains well below last year’s levels.
Source: Redfin
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5. The July trade deficit exceeded expectations as US retailers accelerated holiday import shipments to preempt potential disruptions from an anticipated port strike and ongoing supply chain challenges.
Source: @TheTerminal, Bloomberg Finance L.P.
Source: MarketWatch Read full article
As a result, retail inventories continue to surge.
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6. The federal government’s interest expense is expected to keep climbing even if Treasury yields move lower.
Source: Simon White, Bloomberg Markets Live Blog
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Canada
1. The CFIB small and medium-sized business sentiment (based on 12-month performance expectations) reached its highest level in two years.
• Most sectors and all provinces are in growth territory.
• Here are the constraints businesses identified as limiting sales or production growth.
Source: CFIB
• Expected price and wage increases have been moderating.
Source: CFIB
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2. This chart displays Canada’s GDP per capita, excluding the impact of temporary foreign workers.
Source: Scotiabank Economics
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The Eurozone
1. Germany’s CPI fell to 2% year-over-year this month, coming in below expectations.
Source: CNBC Read full article
• Spain’s inflation is also moderating.
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2. The euro has been rolling over.
• Here is the 2-year Bund yield.
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3. Euro-area business confidence improved this month, topping expectations.
• Services:
• Industry:
• Aggregate index (including consumer sentiment and construction):
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Europe
1. Let’s begin with Sweden.
• The Q2 GDP decline wasn’t as severe as expected due to a rebound in exports.
Source: @economics Read full article
• Retail sales increased in July.
• Consumer confidence was almost unchanged this month.
• Sweden’s unemployment rate increase in July was slightly higher than the Riksbank’s latest forecast, which calls for improving employment conditions from here.
Source: Nordea Markets
– Demand for labor in Sweden remains weak with rising layoffs and subdued new vacancies.
Source: Nordea Markets
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2. EU vehicle registrations were roughly unchanged in July relative to 2023.
Source: @business Read full article
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3. Here is a look at book reading habits in the EU.
Source: Eurostat Read full article
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Japan
1. The Tokyo CPI topped expectations this month, boosting rate hike expectations.
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2. The unemployment rate unexpectedly increased in July, but the jobs-to-openings ratio edged higher.
Source: Reuters Read full article
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3. Industrial production improved in July.
4. Retail sales surprised to the downside.
5. Housing starts returned to the 2023 level in July.
6. Consumer confidence was unchanged in August.
7. Japanese funds have been actively purchasing foreign bonds.
Source: @markets Read full article
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Asia-Pacific
1. South Korea’s industrial production declined sharply in July.
2. New Zealand’s consumer and business sentiment indicators improved this month.
• Building permits rebounded.
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3. Australia’s retail sales growth stalled in July.
• Mortgage lending is accelerating again.
• Business investment unexpectedly tumbled last quarter.
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China
1. The renminbi continues to strengthen.
2. China’s shrinking narrow money supply poses a threat to economic growth.
Source: Alpine Macro
3. Here is a look at China’s exports to the US vs. the rest of the world.
Source: BofA Global Research
4. Protests are on the rise, …
Source: @economics Read full article
… many of which are linked to property developers.
Source: @economics Read full article
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Emerging Markets
1. Brazil’s broad price index rose less than expected in August, with 60% of the index driven by wholesale prices.
2. LatAm markets are trading below their 10-year average valuation.
Source: Matthews International Capital Management Read full article
3. Turkey’s economic confidence continues to deteriorate.
4. Here’s an overview of the free float percentages in EM equity markets.
Source: Torsten Slok, Apollo
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Cryptocurrency
1. It has been a tough week for crypto, with Bitcoin Cash (BCH) and Ether (ETH) underperforming top peers.
Source: FinViz
2. US regulators are poised to address many crypto issues next month..
Source: CoinDesk Read full article
3. This chart shows the source of significant BTC holdings. Mt. Gox is a bankrupt Tokyo-based Bitcoin exchange that began repaying defunct users last month.
Source: @KaikoData
4. The percent of Bitcoin supply in profit (relative to the average cost basis) declined toward average levels.
Source: @glassnode
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Equities
1. It’s been a rough month for tech megacaps relative to the broader market.
2. Earnings expectations for mid and small-cap stocks are increasingly lagging behind those of the S&P 500.
Source: @TheTerminal, Bloomberg Finance L.P.
3. This chart shows S&P 500 contributions to earnings growth by sector.
Source: PGM Global
4. Investment managers are increasing their exposure to stocks.
Source: NAAIM
5. Here’s a historical overview of Fed easing cycles and their impact on equity returns.
Source: Jack Ablin, Cresset Wealth Advisors
6. Stocks and bonds are sending different signals on the economy.
Source: Simon White, Bloomberg Markets Live Blog
7. REITs are experiencing strong fund inflows, …
Source: BofA Global Research
… with BofA’s private clients favoring this asset class above all others over the past four weeks.
Source: BofA Global Research
REITs have outperformed the S&P 500 in recent weeks.
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Rates
1. Treasury funds are witnessing robust inflows as concerns over a potential US economic slowdown grow (2 charts).
Source: BofA Global Research
Source: BofA Global Research
• BofA’s private clients are increasing their portfolio duration.
Source: BofA Global Research
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2. This has been one of the most anticipated Fed rate cut cycles.
Source: MRB Partners
3. Here’s a historical overview of Fed easing cycles and their impact on Treasury yields.
Source: Jack Ablin, Cresset Wealth Advisors
4. The iShares 20+ Year Treasury Bond ETF (TLT) is testing downtrend resistance, although momentum is improving.
5. G7 government bonds are approaching overbought levels, according to MRB’s indicator.
Source: MRB Partners
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Food for Thought
1. Life expectancy by state:
Source: @axios Read full article
2. Percentage of 25- to 64-year-olds with below upper secondary education in selected countries:
Source: @financialtimes Read full article
3. Milk substitutes revenues by region:
Source: Statista
4. Israeli northern border strikes:
Source: @WSJ Read full article
5. Projected fiscal impact of Trump and Harris campaign proposals (2025-2034):
Source: @axios Read full article
6. Reported financial losses among seniors due to fraud:
Source: @bbgvisualdata Read full article
7. The most popular car colors:
Source: Diminished Value of Georgia
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Have a great weekend!
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