The Daily Shot: 30-Oct-24
• The United States
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Rates
• Food for Thought
The United States
1. The US trade deficit in goods widened sharply in September, far surpassing estimates …
… as imports surged and exports slowed.
Source: @TheTerminal, Bloomberg Finance L.P.
Import gains were driven by consumer and capital goods, partly due to companies preparing for potential US East Coast/Gulf port closures.
• The trade deficit shock sent the GDPNow Q3 growth estimate below 3% (2 charts).
Source: Federal Reserve Bank of Atlanta
Source: @TheTerminal, Bloomberg Finance L.P.
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2. Wholesale inventories unexpectedly decline in September, …
… while retail inventories continued to climb.
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3. US job openings dropped sharply last month, falling below their pre-COVID peak.
• The Beveridge curve has now moved well within pre-pandemic territory as labor market imbalances have diminished.
• The sectors driving recent job gains (highlighted in green) experienced declines in job openings.
– Healthcare:
– State and local government:
Source: @TheTerminal, Bloomberg Finance L.P.
– Here is the job openings diffusion index.
• Revisions to job openings have been negative.
Source: @TheTerminal, Bloomberg Finance L.P.
• Shares of recruiting firms suggest that job openings could improve in the months ahead.
Source: @TheTerminal, Bloomberg Finance L.P.
• Quits (voluntary resignations) continue to decline, …
… signaling slower wage growth ahead (2 charts).
Source: Capital Economics
Source: Oxford Economics
• Layoffs remain relatively low.
Source: @TheTerminal, Bloomberg Finance L.P.
Below are some additional measures of layoffs.
Source: Nomura Securities
• Net hires increased.
Source: Capital Economics
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4. Home price appreciation topped expectations in August (2 charts).
• Home prices continue to outpace wages.
• Housing-related equities have been underperforming, …
… as mortgage rates climb.
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5. The Conference Board’s index of consumer confidence jumped this month.
• The labor differential bounced from recent lows.
• More households plan to buy a vehicle.
• The share of US consumers planning a foreign vacation hit a record high.
• Households are less worried about a recession.
Source: The Conference Board Read full article
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6. The Citi Economic Surprise Index continues to rise.
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The United Kingdom
1. Last month’s mortgage approvals topped expectations.
Source: Reuters Read full article
2. The broad money supply growth is accelerating, suggesting robust bank lending.
3. Residential building approvals continue to trend lower.
Source: @financialtimes Read full article
4. Government debt has surged since the financial crisis.
Source: MRB Partners
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The Eurozone
1. Germany’s consumer confidence hit the highest level since 2022, surprising to the upside.
2. Dutch producer confidence worsened this month.
3. Barclays forecasts higher Italian fiscal debt and deficits than government estimates. (2 charts)
Source: Barclays Research
Source: Barclays Research
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4. Demand for cars remains weak despite rising consumer confidence.
Source: Pantheon Macroeconomics
• Passenger car exports have been weak.
Source: Pantheon Macroeconomics
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Europe
1. Sweden’s GDP unexpectedly declined last quarter, marking the third consecutive quarterly contraction and confirming a recession.
Source: Reuters Read full article
• Retail sales edged lower last month.
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2. Asia-to-Europe container freight costs continue their downward trend.
Source: @TheTerminal, Bloomberg Finance L.P.
3. This chart shows support for mainstream parties in the UK and France.
Source: BofA Global Research
4. Here is a look at waste treatment methods by country in the EU and trends in recovery and disposal
Source: Eurostat Read full article
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Japan
1. Consumer confidence softened this month.
2. Here is the shift in Japan’s lower house of parliament between 2021 and 2024 (2 charts)
Source: @financialtimes Read full article
Source: @financialtimes Read full article
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Asia-Pacific
1. Asia-Pacific equities have had a challenging month.
• Here is a look at investible market capitalization in select countries.
Source: The Economist Read full article
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2. Australia’s headline inflation eased last quarter, …
… but core inflation has remained firmer.
• Here is the monthly CPI estimate (year-over-year).
• Services inflation remains elevated.
Source: @economics Read full article
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Emerging Markets
1. Thailand’s September industrial production report was dismal, with output and capacity utilization falling to multi-year lows.
2. South Africa’s broad money supply growth has been accelerating.
3. The Nigerian naira is trading near record lows vs. USD …
… after dollar liquidity crashed.
Source: @markets Read full article
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4. Chile’s unemployment rate surprised to the downside.
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Cryptocurrency
Bitcoin is trading near record highs, testing the next resistance level at $74k.
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Commodities
1. Gold reached another record high, …
… marking 268 consecutive sessions above its 200-day moving average and 86 sessions above its 50-day moving average, …
… as Goldman forecasts further gains.
Source: Goldman Sachs; @MikeZaccardi
• The options market sees about a 17% probability of gold breaching $3,000 by the end of the year.
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2. US milk futures are reversing recent gains.
3. Palm oil futures are surging amid expectations of tight supplies.
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Energy
1. The 25-delta call-put (bullish) skew for Brent crude dropped sharply this week.
Source: @TheTerminal, Bloomberg Finance L.P.
2. The IEA expects significant growth in clean energy while the share of fossil fuels in the global energy mix peaks by 2030.
Source: IEA
• Hedge funds are largely short clean energy stocks.
Source: @business Read full article
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3. Uranium prices have been reversing recent gains, …
… but shares of companies with exposure to nuclear energy are surging.
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Equities
1. The market responded positively to Alphabet’s results, driving shares sharply higher after the close.
Source: @technology Read full article
Stock futures are up.
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2. The percentage of US consumers who expect higher stock prices in a year hit a record high.
3. S&P 500 earnings growth slowed last quarter.
Source: Deutsche Bank Research
Here’s a breakdown attributing the sources of this slowdown.
Source: Deutsche Bank Research
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4. Tech megacaps are seeing more 3+ sigma moves this year.
Source: BofA Global Research; @dailychartbook
5. Fewer companies are discussing weak demand on earnings calls.
Source: BofA Global Research; @GunjanJS
• More companies are mentioning the bottom of the EPS earnings cycle.
Source: BofA Global Research; @dailychartbook
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6. How do equities respond to Treasury yield changes?
Source: Goldman Sachs; @dailychartbook
7. Gavekal Research highlights the relationship between utilities and industrial metals, suggesting that this dynamic could shift depending on the US election outcome (see comments below).
Source: Gavekal Research
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Credit
1. High-yield spreads continue to tighten.
2. A lot of leveraged loans were repriced this year.
Source: @markets Read full article
3. US small business credit card utilization rates are above pre-pandemic levels.
Source: Bank of America Institute
• Small business loan payment growth has outpaced credit card payment growth, according to BofA client data.
Source: Bank of America Institute
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Rates
1. It’s been a challenging month for Treasuries.
• Most of the yield gains were driven by rising risk premiums.
Source: Oxford Economics
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2. Treasury market implied volatility keeps climbing ahead of the US elections.
The 1-month volatility index has sharply outperformed the 3-month index.
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Food for Thought
1. Global market capitalization share over time:
Source: The Economist Read full article
2. Labor productivity in major economies:
Source: The Economist Read full article
3. Percentage of the premiums collected by insurance companies spent on medical claims:
Source: Alpine Macro
4. Spending distribution by individual’s age:
Source: Oxford Economics
5. Amazon deforestation:
Source: @BW Read full article
6. The federal government’s support for US-based semiconductor manufacturing:
Source: @technology Read full article
7. Federally owned land by state:
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