The Daily Shot: 03-Dec-24
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. The ISM Manufacturing PMI indicates that US manufacturing contraction eased in November.
Here are the contributions to the PMI.
Source: @TheTerminal, Bloomberg Finance L.P.
• The index of new orders unexpectedly returned to growth territory, …
… staff reductions slowed …
… and input price gains came to a halt.
• The outperformance of cyclical stocks points to further improvements ahead.
Source: @TheTerminal, Bloomberg Finance L.P.
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2. Construction spending increased more than expected in October.
• The improvement was driven by private residential investment.
Source: @TheTerminal, Bloomberg Finance L.P.
• Construction spending on data centers has surged over the past couple of years.
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3. Retail sales drove the recent positive shift in economic surprises.
Source: MRB Partners
4. This chart shows inflation forecasts under different tariff assumptions, according to Deutsche Bank.
Source: Deutsche Bank Research
5. The US dollar is following the 2016 post-election trajectory.
6. According to LinkUp, the decline in job openings has accelerated.
Source: @PeterBerezinBCA
7. A record number of Americans traveled by air on Thanksgiving.
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Canada
1. Canada’s consumer confidence dropped sharply following Trump’s tariff threat.
2. Manufacturing expansion accelerated in November.
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The United Kingdom
1. The November manufacturing PMI was revised lower as demand softened.
2. Last month’s home price appreciation topped expectations.
Source: Reuters Read full article
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3. The BRC indicator suggests a steep drop in UK retail sales last month.
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The Eurozone
1. France’s Prime Minister, Michel Barnier, is likely to be ousted this week amid the budget impasse.
Source: BBC Read full article
• The French bond spread over Germany has blown out.
Here is the 10-year Spain-France bond spread.
• The sovereign CDS spread keeps widening.
• French stocks continue to widen their underperformance.
Source: @TheTerminal, Bloomberg Finance L.P.
– French corporate earnings expectations are declining sharply compared to their European peers.
• Bund yields are plummeting amid heightened safe-haven demand.
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2. Next, let’s take a look at some manufacturing PMI trends.
• The Netherlands (contraction):
Source: S&P Global PMI
• Spain (slower growth):
• Italy (deeper slump):
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3. Italy’s unemployment rate hit a new low.
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4. Euro-area loan growth is recovering.
Here is the broad money supply.
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Asia-Pacific
1. Japan’s corporate profits unexpectedly declined last quarter (year-over-year).
2. South Korea’s CPI rose slightly last month but came in below expectations.
3. Australia’s residential building approvals kept rising in October. Private houses, however, registered a decline.
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China
1. The renminbi reached its weakest level against the dollar in over a year.
2. Bond yields have been tumbling.
3. Deutsche Bank’s base case is that China’s property sector will ‘muddle through’ in 2025 as prices continue to drop (albeit at a slower pace) and sales recover modestly. (2 charts)
Source: Deutsche Bank Research
Source: Deutsche Bank Research
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Emerging Markets
1. Brazil’s President Lula directed his team to include a range of tax relief measures for the poor in the fiscal package introduced late last week, diminishing the plan’s potential to generate much-needed savings. The Brazilian real hit a record low.
Bond yields jumped.
Stocks sold off in recent days (2 charts).
• Faster inflation is exacerbating the situation.
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2. The Indian rupee has been under pressure.
3. Mexico’s trade balance unexpectedly swung into surplus, …
… as exports surged.
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4. This scatterplot shows rate differentials with the US vs. implied volatility.
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Cryptocurrency
1. Bitcoin hit resistance at $100k.
Source: @crypto Read full article
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2. XRP’s surge has been remarkable.
Source: @markets Read full article
3. Crypto fund flows slowed last week as investors exited long-Bitcoin and multi-asset products. However, Ethereum-focused funds saw significant inflows. (2 charts)
Source: CoinShares Read full article
Source: CoinShares Read full article
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4. Here is a look at the top holders of the iShares Ethereum Trust ETF (ETHA).
Source: @KaikoData
• This ETF is seeing some inflows.
Source: @markets Read full article
• ETH/USD is approaching initial resistance at $4K.
– The ETH/BTC price ratio is improving from oversold levels.
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Commodities
Coffee futures took a hit as the Brazilian real reached a record low.
Source: barchart.com Read full article
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Equities
1. Tech stocks are back in favor this week, with the broader market struggling (2 charts).
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2. The S&P 500 reached its 54th record high of the year.
The Nasdaq Composite hit its 33rd record high.
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3. The Russell 2000 is holding resistance at the 2021 peak.
• Small-cap earnings expectations continue to diverge from large caps.
Source: @TheTerminal, Bloomberg Finance L.P.
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4. So far, all S&P 500 sectors have maintained short-term uptrends.
Source: SentimenTrader
5. Deutsche Bank’s earnings forecast indicates stronger share buybacks next year.
Source: Deutsche Bank Research
6. Here is a look at valuations. Only small caps are trading at multiples below their 10-year average.
7. Year three of a bull market typically has significant return dispersion.
Source: MarketDesk Research
8. ETF inflows have accelerated.
Source: @EricBalchunas
• Here is a look at fund flows into the US vs. the rest of the world.
Source: BofA Global Research
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9. This chart shows tariff exposure by sector.
Source: Goldman Sachs; @WallStJesus
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Credit
1. Leveraged loan repricing volume reached the highest monthly tally since June.
Source: PitchBook
2. Corporate debt trades have been massive, fueled by ETF flows.
Source: @markets Read full article
3. Here’s an overview of fixed-income yields and implied volatility (expected returns vs. perceived risk).
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Global Developments
1. US equities outperformed last month following the election result. The dollar’s strength weighed on international assets in USD terms, while industrial and precious metals ended lower.
Source: Deutsche Bank Research
2. Global manufacturing activity stabilized last month.
Source: S&P Global PMI
The chart below displays the November manufacturing PMIs by country.
Source: S&P Global PMI
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3. Central bank independence has significantly increased in recent decades.
Source: @financialtimes Read full article
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Food for Thought
1. Ad content as a share of social media platforms:
2. Client assets held by major US banks in Q3:
Source: @wealth Read full article
3. The biggest exporters:
Source: Visual Capitalist Read full article
4. Earnings returns on masters degrees in the UK:
Source: The Economist Read full article
5. Air and drone strike trends by Ukraine and Russia through November 2024:
Source: @financialtimes Read full article
6. The Democratic Party’s image shifted from an economic to a sociocultural focus.
Source: @financialtimes Read full article
7. UK lighthouses:
Source: Data Is Beautiful
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