The Daily Shot: 30-Sep-24
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Japan
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. Real consumer spending edged higher in August, in line with expectations.
– Spending on goods leveled off in August, while expenditures on services continued to rise.
Source: @TheTerminal, Bloomberg Finance L.P.
• Disposable personal income growth slowed in recent months.
Source: @TheTerminal, Bloomberg Finance L.P.
– This chart displays real personal income, excluding government transfers.
– Real disposable income per capita has been following the pre-COVID trend.
Source: @ernietedeschi
• The savings rate, which has been revised higher, remains below pre-COVID levels.
– Here is the revision’s impact on excess savings.
Source: BofA Global Research; @MikeZaccardi
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2. The PCE inflation report showed slower inflation in August.
• Housing inflation remains elevated.
• Here is the supercore PCE index (monthly changes).
• This chart shows the Dallas Fed’s trimmed mean PCE.
Source: Reuters Read full article
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3. The U. Michigan Consumer Sentiment Index (final measure) showed some improvement.
Source: @economics Read full article
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4. The US trade deficit in goods narrowed significantly in August as imports declined.
Source: @TheTerminal, Bloomberg Finance L.P.
The drop in imports was driven by a reduction in industrial goods, while consumer goods imports continued to increase.
Source: @TheTerminal, Bloomberg Finance L.P.
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5. Economists have once again upgraded their estimate for this year’s GDP growth amid robust domestic private demand.
• Economists expect another 50 bps of rate reductions this year.
Source: @TheTerminal, Bloomberg Finance L.P.
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6. US assets increasingly dominate global investors’ portfolios.
Source: Goldman Sachs; @MikeZaccardi
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Canada
1. GDP growth strengthened in July, but estimates indicate no growth in August.
Source: @WSJ Read full article
Here is the July GDP growth by sector.
Source: Statistics Canada Read full article
2. Economists have been boosting Canada’s GDP growth estimates for this year.
3. Economists see another 50 bps of rate reductions in 2024.
Source: @TheTerminal, Bloomberg Finance L.P.
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The United Kingdom
1. The September CBI report showed a rebound in retail sales.
Source: Reuters Read full article
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2. Government debt reached 100% of GDP for the first time since 1961 and is forecasted to accelerate further.
Source: Deutsche Bank Research
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The Eurozone
1. French and Spanish CPI reports indicated further slowing of inflation this month, with both measures coming in below forecasts.
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2. Swap rates continue to sink amid expectations of deeper ECB rate cuts.
• The market expects another 50 bps of rate reductions this year.
Source: @TheTerminal, Bloomberg Finance L.P.
• The expected terminal rate dropped to 1.8%.
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3. Inflation expectations have been trending lower.
• Market-based measures of inflation expectations have been moving lower as well.
Source: ECB
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4. Services sentiment improved slightly in September, …
… while industrial confidence continues to deteriorate.
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5. Germany’s unemployment continues to climb.
6. French consumer spending on goods unexpectedly increased in August.
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Japan
1. The stock market retreated following the yen’s rebound after Shigeru Ishiba was selected as prime minister.
• Traders continue to boost their bets on the yen.
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2. Industrial production surprised to the downside.
Source: @WSJ Read full article
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3. Retail sales held up well in August.
4. Housing starts remain depressed.
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China
1. A soft September manufacturing PMI report from S&P Global underscores the need for monetary stimulus, …
Source: @economics Read full article
… driving stock prices higher on Monday on expectations of more PBoC easing (2 charts).
Source: @TheTerminal, Bloomberg Finance L.P.
• The Hang Seng Index broke above resistance with expanding breadth.
Source: Aazan Habib, Paradigm Capital
• Demand for China-focused ETF call options soared.
Source: Goldman Sachs; @WallStJesus
• Turnover surged.
• Hedge funds are buying.
Source: Goldman Sachs
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2. Local governments are issuing more debt to stimulate growth.
Source: @economics Read full article
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Emerging Markets
1. Brazil’s broad inflation measure (which includes producer prices) was higher than expected.
• The unemployment rate continues to fall.
• Economists increased Brazil’s growth and CPI forecasts for 2024, …
… expecting more rate hikes this year.
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2. Next, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Iron ore continues to surge.
Source: @markets Read full article
2. Aluminum prices are climbing.
3. Speculative accounts keep boosting their bets on gold.
4. The Invesco Commodities ETF (DBC), composed mostly of energy and gold, is testing long-term support.
5. Agricultural commodities have sharply diverged from the broad commodities index.
Source: @TaviCosta
6. This chart shows last week’s performance across commodity markets.
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Energy
1. The probability of another tropical disturbance in the Gulf of Mexico over the next seven days increased from 40% to 50%.
Source: @NWSNHC
Source: Reuters Read full article
• Natural gas prices have been rising.
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2. Brent crude positioning is increasingly bearish.
Source: @KevRGordon
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Equities
1. Market breadth continues to improve.
2. Goldman sees the S&P 500 dipping below current levels by the end of the year.
Source: Goldman Sachs; @MikeZaccardi
3. IPO activity has been depressed.
Source: @yuris
4. Hedge funds remain cautious on tech.
Source: Goldman Sachs
5. Nearly a third of IRA rollovers made at Vanguard in 2015 were still entirely in cash seven years later.
Source: @WSJ Read full article
6. Next, we have some performance data from last week.
• Sectors:
– It was a good week for mining firms as China unveiled its monetary bazooka.
• Equity factors:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. The supply surge in the US high-yield bond bond market continues.
Source: PitchBook
2. US interest rate coverage ratios have stabilized after declining for several quarters.
Source: Morgan Stanley Research
3. Here is last week’s performance across credit markets.
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Global Developments
1. Global liquidity and money supply have troughed. (2 charts)
Source: @FT
Source: @TaviCosta
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2. Monetary easing accelerated in September.
Source: BofA Global Research
3. Next, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equity indices:
• USD-denominated equity ETFs:
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Food for Thought
1. Growth in religious unaffiliation across US age groups from 2013 to 2023:
Source: @axios Read full article
2. Rising support for expansionary fiscal policy across the political spectrum:
Source: IMF Read full article
3. Concerns about misinformation:
Source: @axios Read full article
4. Ukrainians’ perspectives on negotiating with Russia and strategies for peace by demographic:
Source: @WSJ Read full article
5. US land owned by foreign investors:
Source: Statista
6. What are the implications of repeatedly training an AI model on outputs generated by the same AI?
Source: The New York Times Read full article
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