The Daily Shot: 10-Sep-24
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Rates
• Global Developments
• Food for Thought
The United States
1. Consumer credit surged in July, topping expectations.
Source: @economics Read full article
• Credit card balances climbed further.
– Credit card balances as a share of disposable income are nearing pre-COVID levels, while total consumer credit relative to income has been trending downward.
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2. Student loan payments have been declining rapidly, …
Source: @economics Read full article
… accompanied by rising levels of past-due debt.
Source: GAO
Official student debt delinquency rates are expected to surge once late payments begin being reported to credit bureaus again, starting in October.
Source: @economics Read full article
Source: Detroit Free Press Read full article
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3. According to the NY Fed’s Survey of Consumer Expectations, households are growing increasingly concerned about their ability to make minimum debt payments.
4. Next, we have some additional updates on the labor market.
• Job growth is increasingly concentrated.
Source: Deutsche Bank Research
• Some of the weakness in the August payrolls data can be attributed to seasonal adjustments. The unadjusted figures are not significantly lower than those from August 2023.
Source: Oxford Economics
• Here is Goldman’s projection for the breakeven job growth.
Source: Goldman Sachs; @MikeZaccardi
• Most of the increase in the unemployment rate over the past year was driven by rising labor supply, especially since January of this year. (3 charts)
Source: Deutsche Bank Research
Source: Deutsche Bank Research
Source: @TheTerminal, Bloomberg Finance L.P.
• Here are the contributions to the unemployment rate by age and education.
Source: @TheTerminal, Bloomberg Finance L.P.
Source: @TheTerminal, Bloomberg Finance L.P.
• Workers don’t stay unemployed for too long.
Source: Oxford Economics
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5. Finally, we have some updates on inflation.
• The downtrend in core CPI remains intact.
Source: Deutsche Bank Research
– Inflation distribution is shifting lower.
Source: Deutsche Bank Research
– Real GDP growth suggests a pause in the disinflation trend.
Source: Deutsche Bank Research
• How would further tariff increases impact PCE inflation?
Source: Goldman Sachs; @MikeZaccardi
• Is the market too complacent about inflation risks?
Source: MRB Partners
• Could we see an uptick in used cars and truck prices (2 charts)?
Source: Deutsche Bank Research
• The NY Fed’s consumer survey inflation expectations edged higher last month.
Source: @TheTerminal, Bloomberg Finance L.P.
• What should we expect from this week’s CPI report?
– Morgan Stanley (0.20% increase in the core CPI):
Source: Morgan Stanley Research
– Nomura (0.17% increase in the core CPI):
Source: Nomura Securities
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Canada
1. Consumer confidence is grinding higher.
2. Immigrants are having more difficulties finding work.
Source: @economics Read full article
3. Here is a look at voting intentions.
Source: The Economist Read full article
4. The TSX Venture Composite (micro caps) continues to hold support with improving breadth and momentum.
Source: Aazan Habib, Paradigm Capital
• Breadth among TSX small-cap and energy and material sectors has weakened and does not appear oversold. (2 charts)
Source: Aazan Habib, Paradigm Capital
Source: Aazan Habib, Paradigm Capital
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The United Kingdom
1. Data from placement agencies indicate ongoing softness in the UK labor market.
Source: S&P Global PMI
2. Apartment prices lag behind other housing sectors.
Source: @financialtimes Read full article
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The Eurozone
1. A 25 bps ECB rate cut is fully priced in for this week.
• Economists expect an 85 bps rate cut in total by the end of the year.
Source: @TheTerminal, Bloomberg Finance L.P.
– The market sees a 62 bps reduction.
Source: @TheTerminal, Bloomberg Finance L.P.
– The ECB is expected to take the Euro Short-Term Rate below 2%.
2. Euro-area services inflation remains sticky.
Source: Oxford Economics
3. Wage growth has been moderating.
Source: @economics Read full article
• This chart shows the evolution of real compensation per employee.
Source: ECB Read full article
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4. The Sentix investor confidence index declined again this month.
Source: RTT News Read full article
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5. Dutch consumer spending growth continues to slow.
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Asia-Pacific
1. Taiwan’s trade surplus hit a record high, …
… boosted by robust exports.
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2. Australia’s sentiment indicators have been soft.
• Business sentiment:
• Consumer confidence:
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China
1. The trade surplus hit a record high for the month of August, …
… boosted by strong exports.
Source: Reuters Read full article
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2. Bond yields continue to trend lower, with the 10-year rate hitting a record low.
3. Consumer sentiment remains depressed.
Source: The Economist Read full article
4. State-owned banks have been assisting Beijing in supporting the renminbi, resulting in significant losses for these institutions.
Source: @markets Read full article
5. Beijing is committing more capital to Africa.
Source: @bpolitics Read full article
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Emerging Markets
1. Mexico’s CPI eased in August.
Source: @economics Read full article
• Consumer confidence hit a multi-year high.
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2. Argentina’s economic activity appears to have bottomed.
• Manufacturing production:
• Construction:
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3. The Philippines’ trade deficit in July came in wider than expected.
4. The contraction in global manufacturing doesn’t bode well for EM equity prices.
Source: BCA Research
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Cryptocurrency
1. Bitcoin has posted declines in seven of the last twelve Septembers.
Source: @KaikoData
2. Short-term bitcoin option expiries have seen the sharpest rise.
Source: @KaikoData
3. Crypto funds saw significant outflows last week. (3 charts)
Source: CoinShares Read full article
Source: BofA Global Research
Source: CoinShares Read full article
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Commodities
1. Net long speculative positioning in gold futures appears stretched.
Source: Longview Economics
• Upside momentum in gold futures is starting to fade despite the recent price breakout.
2. The copper/gold price ratio continues to decline, reversing more than half of its post-COVID rally.
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Energy
1. Here’s an overview of the potential impact of various scenarios the crude oil market could encounter next year.
Source: Goldman Sachs; @dailychartbook
2. US utility-scale battery power capacity has been surging since the onset of Covid.
Source: @EIAgov Read full article
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Equities
1. The market is focused on tomorrow’s CPI report. Here is the short-term S&P 500 implied volatility curve.
Source: @TheTerminal, Bloomberg Finance L.P.
2. Utilities and consumer staples have outperformed the S&P 500 year-to-date as investors rotate into defensive sectors.
3. Below are some performance trends over the past 20 trading sessions.
• Dividend growers vs. buyback focus:
• Quality:
• AI beneficiaries:
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4. Globally, earnings growth is broadening.
Source: TS Lombard
5. This chart illustrates return attribution across key global indices over the past 12 months.
Source: Goldman Sachs; @MikeZaccardi
6. Households continue to boost their allocations to stocks.
Source: @WSJ Read full article
7. Next, we have equity market performance under varying interest rate environments.
Source: J.P. Morgan Asset Management
8. As the US dollar typically strengthens in a risk-off environment, it helps cushion equity downturns for foreign investors, enhancing the appeal of US stocks abroad.
Source: Gavekal Research
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Rates
1. The market is pricing in over 250 bps of rate cuts before the Fed pauses its easing cycle.
2. The Treasury curve continues to shift lower.
3. The iShares 20+ Year Treasury Bond ETF (TLT) hit resistance at 100.
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Global Developments
1. Treasuries and base metals are pricing in higher odds of a recession.
Source: @TheTerminal, Bloomberg Finance L.P.
2. Commodity currencies are in a wedge pattern relative to the US dollar.
Source: BCA Research
3. Here is a look at satisfaction with affordable housing availability in select economies.
Source: @axios Read full article
4. US, UK, and Eurozone core inflation continues to track above central bank targets.
Source: BlackRock Investment Institute Read full article
5. This chart shows the evolution of GDP growth projections for 2025 in advanced economies.
Source: ECB Read full article
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Food for Thought
1. Actual and effective corporate tax rate for S&P 500 companies:
Source: Goldman Sachs; @MikeZaccardi
2. Declining disapproval of labor unions among US adults:
Source: @axios Read full article
3. Trends in Reddit usage:
Source: @CivicScience Read full article
4. Homelessness rates:
Source: Our World in Data
5. Another warm summer:
Source: @axios Read full article
6. Meta’s revenue per employee:
Source: @axios Read full article
7. Evolution of Microsoft Word logos from 1983 to present:
Source: Webflow Read full article
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