The Daily Shot: 04-Dec-24
• The United States
• The Eurozone
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Commodities
• Energy
• Equities
• Rates
• Global Developments
• Food for Thought
The United States
1. Job openings in October exceeded expectations, …
Source: MarketWatch Read full article
… accompanied by a sharp rise in quits (voluntary resignations), signaling a robust labor market.
– Hiring slowed.
– Layoffs remained below pre-COVID levels.
Source: @TheTerminal, Bloomberg Finance L.P.
• Here is a look at the changes in job openings by sector in October (2nd panel shows the diffusion index).
– Below are some sector trends in job openings.
• The Beveridge curve remains within its pre-pandemic range, indicating that labor market imbalances have eased over the past year.
• Shares of recruiting firms continue to signal improvements in job openings.
Source: @TheTerminal, Bloomberg Finance L.P.
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2. US economic sentiment keeps rising.
3. Is the US dollar too strong?
Source: BofA Global Research
4. US vehicle sales continued to increase last month, topping expectations.
Source: Wards Intelligence Read full article
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5. Small businesses need the Fed to keep cutting rates.
Source: Goldman Sachs; @MikeZaccardi
6. Next, we have some updates on the housing market.
• Pending home sales strengthened in October.
Source: MarketWatch Read full article
• Economists have been lowering their 2025 forecasts for housing starts and existing home sales …
… due to expectations of persistently high interest rates.
Source: Wells Fargo Securities
– Here is a forecast for housing starts from Wells Fargo.
Source: Wells Fargo Securities
• Total US housing inventory per capita has been trending lower.
Source: Torsten Slok, Apollo
• The price premium on newly built homes compared to existing homes has been declining …
Source: @WSJ Read full article
… amid tight inventories.
Source: @WSJ Read full article
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The Eurozone
1. Deutsche Bank anticipates euro-area GDP growth to further lag behind its pre-COVID trend.
Source: Deutsche Bank Research
2. The Citi Eurozone Economic Surprise index declined sharply after weak PMI data.
Source: @TheTerminal, Bloomberg Finance L.P.
3. This chart shows Germany’s bilateral trade balance with the US and China over time.
Source: The Economist Read full article
4. Dividends typically account for the majority of European equity returns.
Source: Goldman Sachs; @MikeZaccardi
• Investors have been pessimistic about the euro area.
Source: MRB Partners
• Euro Stoxx 50 breadth is improving.
Source: Damanick Dantes; Bloomberg
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Europe
1. Growth in Sweden’s factory activity has accelerated.
• Manufacturing confidence improved last month.
• Consumer sentiment continues to strengthen.
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2. Poland’s manufacturing PMI indicated a slight decline in November, while Czech factory activity remains deeply in contraction territory.
Source: S&P Global PMI
Source: S&P Global PMI
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3. Here is a look at inflation rates across the EU.
Source: Eurostat Read full article
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Asia-Pacific
1. South Korean President Yoon Suk Yeol declared martial law late Tuesday, citing threats from pro-North Korean forces, only to reverse the decision hours later after Parliament overwhelmingly rejected it in a 190-0 vote. The move sparked political turmoil, with lawmakers scaling fences to access the National Assembly and widespread criticism from both opposition and ruling parties. Yoon, whose approval ratings have plummeted below 20%, faced accusations of overstepping constitutional bounds, leading to calls for impeachment. The declaration rattled markets, with declines in South Korean stocks, the won, and investor sentiment, prompting emergency measures to stabilize the economy. The political crisis highlighted deep divisions in South Korean politics and raised questions about Yoon’s leadership and political future.
Source: @WSJ Read full article
Source: Bloomberg Read full article
• The South Korean won tumbled following the declaration of martial law on Tuesday but partially rebounded after Yoon Suk Yeol was compelled to reverse the decision.
Overnight implied vol in the South Korean won spiked as the political fallout unfolded.
Source: @TheTerminal, Bloomberg Finance L.P.
• South Korean stocks sold off.
Here is the USD-denominated ETF.
– Equity valuations are near the lowest level since the start of the pandemic.
Source: @DavidInglesTV
• The sovereign CDS spread widened.
• South Korea experiences some of the highest levels of political polarization globally, comparable to the United States.
Source: Pew Research Center Read full article
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2. Australia’s Q3 GDP growth surprised to the downside.
Source: CNBC Read full article
• The Australian dollar and bond yields fell in response to the weak GDP report.
Expectations for RBA rate cuts next year have risen.
• Separately, Australia’s corporate profits unexpectedly fell for the third consecutive quarter.
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China
1. China’s service-sector PMIs remained in growth territory but came in below expectations.
• Official PMI:
• S&P Global PMI:
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2. The 10-year yield continues to hit record lows.
• China’s 30-year yield is now below that of Japan.
Source: @TheTerminal, Bloomberg Finance L.P.
3. Real interest rates remain elevated while bank credit has been falling.
Source: Alpine Macro
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Emerging Markets
1. Brazil’s Q3 GDP growth was firmer than expected.
Source: @economics Read full article
• Factory activity remains in growth mode.
• Vehicle sales are holding at multi-year highs.
• Bond yields continue to climb due to fiscal concerns.
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2. South Africa’s GDP unexpectedly contracted last quarter.
• Vehicle sales are now running well above last year’s levels.
• South Africa’s trade surplus topped expectations.
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3. Turkey’s inflation is gradually easing.
• Economists boosted their estimates for next year’s CPI.
• The Q3 GDP growth was below forecasts.
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4. EM GDP growth has been accelerating, outpacing developed markets.
Source: MRB Partners
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Commodities
1. US soybean meal futures are trading near the lowest levels since 2020.
2. The copper/gold price ratio is holding support at the bottom of its downtrend channel.
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Energy
1. US natural gas futures have reversed most of the recent gains.
2. European natural gas storage has dropped to its lowest level since 2020, …
… driven by sharp withdrawals caused by cold weather.
Source: @JavierBlas
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3. Saudi Arabia’s market share of crude oil production has been trending lower.
Source: @JohnArnoldFndtn
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Equities
1. The Magnificent 7 stocks reached their 50th record high of the year.
2. The S&P 500 continues to track its 2016 post-election trend.
• December tends to be a good month for US stocks.
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3. VIX is at the lowest level since July.
• The S&P 500 intraday trading range has collapsed.
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4. The most liquid ETF is becoming less liquid.
5. Overnight gains in US equities have significantly outpaced intraday gains.
Source: Chris Murphy, Susquehanna International Group
6. Retail trading activity is near the highs relative to the overall trading volume.
Source: Goldman Sachs; @WallStJesus
7. Next, we have some sector updates.
• US financials have historically outperformed when both rates and credit spreads are falling.
Source: Denise Chisholm; Fidelity Investments
• Which sectors are most focused on tariffs?
Source: @TheTerminal, Bloomberg Finance L.P.
• Next, we have AI-generated sector sentiment scores (-5 to 5) derived from recent management commentary.
• This scatterplot shows sector sensitivity to the S&P 500 and Treasury yields.
Source: Deutsche Bank Research
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Rates
1. The market is pricing in a 74% probability of a Fed rate cut this month.
2. The 10-year Treasury yield declined as markets pared expectations for rate cuts next year.
Source: MRB Partners
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Global Developments
1. Here is a look at monthly ETF flows by category.
Source: @Todd_Sohn
2. This scatterplot displays each country’s share of imports from and exports to the US.
Source: Barclays Research
3. Finally, we have government deficits in selected economies.
Source: BofA Global Research
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Food for Thought
1. Reliance on social media influencers for news:
Source: Pew Research Center Read full article
2. Shifts in US political views:
Source: @financialtimes Read full article
3. Trends in civilian employment by US federal agencies and military branches:
Source: @WSJ Read full article
4. Google Chrome dominates the browser market share worldwide.
Source: @chartrdaily
5. ChatGPT retains its lead as the most widely used AI tool in a shifting market.
Source: Statista
6. China’s spate of mass violence:
Source: @bpolitics Read full article
7. The historical trajectory of child mortality rates across societies:
Source: Our World in Data
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