The Daily Shot: 04-Nov-24
• The United States
• Canada
• The United Kingdom
• Europe
• Asia-Pacific
• Emerging Markets
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. October saw the smallest increase in US payrolls since 2020, falling well below forecasts, with private payrolls contracting.
Much of this weakness, though not all, can be attributed to the impact of hurricanes and the Boeing strike (3 charts).
Source: Barclays Research
Source: TS Lombard
• Here are the contributions (2 charts).
Source: @TheTerminal, Bloomberg Finance L.P.
Source: CNBC Read full article
• Temp help services payrolls saw a sharp decline.
• The employment diffusion index held in positive territory.
• The unemployment rate held steady.
Here is the underemployment rate.
• Prime-age labor force participation declined.
• Wage growth was a bit firmer than expected.
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2. Treasury yields initially dipped in response to the weak employment report but rebounded as the market absorbed the underlying causes of the weakness.
Here are the 12-month charts.
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3. The ISM Manufacturing PMI indicated a further contraction in factory activity.
– New orders:
– Employment:
• Input prices are rising again.
• The spread between the ISM orders and inventories subindices indicates potential improvements in US manufacturing activity in the months ahead.
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3. Construction spending edged higher in September, …
… with residential construction showing a modest increase.
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4. US vehicle sales were firmer than expected in October, hitting the highest level since 2021.
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Canada
1. The manufacturing PMI moved further into growth territory in October, …
… with hiring accelerating.
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2. The yield curve has been flattening at the longer end.
3. Here is a look at Oxford Economics’ household leverage forecast.
Source: Oxford Economics
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The United Kingdom
1. The UK’s final manufacturing PMI fell below 50, indicating a contraction.
2. Mortgage approvals are rising as house prices remain elevated.
Source: Variant Perception
3. The current level of fiscal loosening is the highest since the pandemic.
Source: Deutsche Bank Research
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Europe
1. French household spending on goods held steady in September.
2. Spain’s economy has been outperforming its euro-area peers.
Source: Nordea Markets
3. Sweden’s factory activity picked up momentum in October.
4. Next, we have some updates on Switzerland.
• Inflation surprised to the downside.
Source: @economics Read full article
• The franc weakened in response to the CPI surprise.
– A stronger CHF has driven imported goods deflation in recent months.
Source: Deutsche Bank Research
– Switzerland meets the US Treasury Department’s thresholds of a currency manipulator.
Source: Deutsche Bank Research
• Swiss short-term bond yields have been trending lower.
• The key stock market index held support at the 200-day moving average.
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Asia-Pacific
1. The lag structure of the output gap could keep Japan’s inflation elevated.
Source: MRB Partners
2. Asian IG corporate bond spreads have been tightening.
3. Australia’s inflation tracker increased in October.
• Job postings held steady.
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Emerging Markets
1. Brazil’s industrial production strengthened in September.
• The manufacturing PMI is holding in expansion territory.
• Rate hikes are coming.
Source: @economics Read full article
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2. Mexico’s PMI continues to show weakness in the nation’s factory activity.
3. South Africa’s manufacturing sector continued to expand in October.
4. Nigeria’s business activity is shrinking.
5. India’s capital outflows are subsiding, which could benefit Indian equities versus China.
Source: MRB Partners
6. Turkey’s manufacturing PMI remains in contraction territory.
7. Next, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Speculative accounts have shifted to a net long position in US corn futures.
By the way, the US midwest region is facing extreme drought conditions.
Source: USDA Read full article
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2. Speculators continue to bet on Platinum.
3. Lumber prices have been moving higher.
4. Here is last week’s performance data.
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Energy
1. Brent crude futures are at their 50-day moving average.
Source: @TheTerminal, Bloomberg Finance L.P.
2. The US rig count has been trending lower.
3. The global inventory drag on oil prices has been easing.
Source: Simon White, Bloomberg Markets Live Blog
4. US gasoline prices at the pump have been falling.
5. Uranium prices are under pressure.
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Equities
1. The S&P 500 breadth has weakened in recent weeks.
2. The outperformance of cyclicals over defensives has diverged from the ISM Manufacturing PMI.
Source: @TheTerminal, Bloomberg Finance L.P.
3. Historically, a basket of “hard-landing” stocks has initially underperformed in the first two months after a 50 bps Fed rate cut but has significantly outperformed thereafter.
Source: BlackRock Investment Institute
4. Previous breakdowns in the copper/gold price ratio occurred alongside pullbacks in the S&P 500.
Source: SentimenTrader
5. Analysts have been lowering their 2025 earnings projections for the Magnificent 7.
Source: @markets Read full article
6. Berkshire Hathaway is sitting on a lot of cash.
Source: @financialtimes Read full article
7. VIX has been above its 200-day moving average for 78 consecutive sessions.
8. Most new ETF tickers now consist of four symbols.
Source: @markets Read full article
9. Next, we have some performance data from last week.
• Sectors:
• Equity factors:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. Here is a look at the maturity wall across key credit markets.
Source: Torsten Slok, Apollo
2. Treasury volatility and IG bond spreads have diverged.
Source: PGM Global
3. Next, we have last week’s performance data.
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Rates
1. The 10yr – 2yr Treasury spread held support at the 50-day moving average.
Source: @TheTerminal, Bloomberg Finance L.P.
2. BofA’s private clients continue to shift from T-bills to notes and bonds (extending duration).
Source: BofA Global Research
3. The Fed’s RRP facility balance hit the lowest level since 2021 as money market funds find better value in T-bills.
Source: @markets Read full article
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Global Developments
1. The US dollar is lower this morning as the rally appears to be fading.
2. October was a rough month for markets, with bonds and equities losing ground. Silver, gold, and oil were up in dollar terms.
Source: Deutsche Bank Research
3. Volatility has risen across asset classes ahead of the US elections.
Source: @markets Read full article
4. 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. Comparison of average US annual household income for military vs. non-military families:
Source: Wells Fargo Securities
2. Time taken to announce US presidential election winners:
Source: The Economist Read full article
3. Counter-partisan ballot measures in trifecta states by issue area:
Source: @MaryEllenKlas, @opinion Read full article
4. Americans of Puerto Rican origin:
Source: @axios Read full article
5. US flood disasters:
Source: The New York Times Read full article
6. US cheese consumption per capita:
Source: @chartrdaily
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