December 10, 2024December 10, 2024 by The Daily Shot Editor: Lev Borodovsky

Households expect slower inflation on gasoline, food, and rent

The Daily Shot: 10-Dec-24
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Asia-Pacific
• China
• India
• Emerging Markets
• Cryptocurrencies
• Commodities
• Equities
• Rates
• Global Developments
• Food for Thought

The United States

1. Let’s start with the NY Fed’s Survey of Consumer Expectations.

• Inflation expectations edged higher last month, …

… but consumers expect price gains on gasoline, food, and rent to ease further.

• Fewer households expect to be worse off financially in 12 months (2 charts).

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2. The Citi US Economic Surprise Index has peaked.

3. The wholesale inventories-to-sales ratio for household appliances and consumer electronics has been falling.

4. Public companies are becoming less concerned about labor shortages and labor costs.

Source: Goldman Sachs; @MikeZaccardi

5. Many metro areas see rents rising faster than incomes.

Source: Apartment List

6. Mortgage rates have been falling.

7. Debt servicing costs are on track to make up roughly 13% of federal government spending.

Source: Torsten Slok, Apollo

Canada

1. Canada’s consumer confidence continues to decline amid Trump’s tariff threats.

2. The loonie remains under pressure following the November employment report.

The United Kingdom

1. Job placements declined at a faster pace in November.

Source: S&P Global PMI

2. Goods prices are deflationary, while progress on services inflation has been slow.

Source: Longview Economics

• Fewer CPI subcomponents are rising rapidly.

Source: Longview Economics

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3. Here’s an overview of regional industry specialization in the UK, with London leading in company count, while other regions excel in niche areas such as advanced manufacturing and life sciences.

Source: @financialtimes Read full article

4. Finally, we have UK company share ownership by beneficiary type since 1963.

Source: The Economist Read full article

The Eurozone

1. The Sentix index of investor confidence unexpectedly deteriorated this month.

Source: RTT News Read full article

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2. The Citi Economic Surprise Index continues to trend lower after the November PMI disappointment.

3. The market anticipates a 25 bps ECB rate cut this month, though speculation about jumbo rate reductions continues.

Source: @economics Read full article

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4. Projections for Eurozone and US economic growth continue to diverge.

Source: @TheTerminal, Bloomberg Finance L.P.

5. This chart shows the contributions to Germany’s industrial slump.

Source: @DanielKral1, @OxfordEconomics

6. France will need substantial austerity measures to comply with the EU fiscal rules.

Source: Morgan Stanley Research

7. Finally, here is a look at Eurozone price trends for frequently purchased goods since the pandemic.

Source: @financialtimes Read full article

Europe

1. Sweden’s inflation increased in November.

2. The European economic policy uncertainty index has been rising.

Source: @economics Read full article

3. EU fiscal consolidation plans look ambitious.

Source: Eleonora Mavroeidi; @TheTerminal, Bloomberg Finance L.P. Read full article

4. Here is a look at electricity and natural gas prices in the EU over time.

Source: Eurostat Read full article

Asia-Pacific

1. Taiwan’s November exports growth was firmer than expected.

2. New Zealand’s composite PMI has stabilized at low levels, reflecting continued weakness in overall economic growth.

Source: Capital Economics

3. Next, we have some updates on Australia.

• The RBA left rates unchanged but struck a somewhat dovish tone.

Source: @economics Read full article

– A February rate cut is now in play.

– The Aussie dollar and bond yields declined.

• The S&P/ASX 200 tested resistance at the upper boundary of its uptrend channel.

• Business confidence declined in November.

• Private sector credit growth has been strengthening.

China

1. Stocks are higher after Beijing’s stimulus announcements.

Source: @TheTerminal, Bloomberg Finance L.P.

2. China’s export growth came in below expectations in November, …

… while imports unexpectedly fell year-over-year.

Source: @WSJ Read full article

Here is the cumulative (year-to-date) trade balance.

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3. FX reserves edged higher.

India

1. The rupee continues to hit record lows vs. the dollar.

2. The Nifty 50 Index held uptrend support.

3. It’s been a good year for IPOs.

Source: @markets Read full article

4. Foreigners are buying Indian stocks again.

Source: @markets Read full article

Emerging Markets

1. Let’s begin with Chile.

• Economic activity (sligthly higher in October):

• Industrial production:

• Retail sales (stronger than expected):

• Wage growth:

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2. Brazil’s bond yields continue to surge due to fiscal concerns.

3. Mexico’s inflation continues to ease.

Source: @economics Read full article

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4. Within EM, Mexico, Taiwan, and Vietnam appear to be the most vulnerable to US tariffs.

Source: MRB Partners

5. Here is a look at sovereign debt rating changes by Fitch from 2020 to 2024.

Source: ING

Cryptocurrencies

1. BTC/USD’s upside momentum has slowed over the past week.

2. There was another spike in BTC long liquidations after the crypto returned below $100K.

Source: Coinglass

3. BTC options volume is recovering but still lags behind the high in November.

Source: @glassnode

4. Crypto funds saw record inflows last week led by Ethereum-focused products. (2 charts)

Source: CoinShares Read full article

Source: CoinShares Read full article

This chart shows the cumulative crypto fund flows.

Source: Deutsche Bank Research

Commodities

1. China resumed its reserve gold purchases last month after a pause.

2. A sustained recovery in the Shanghai Property Index could help copper futures maintain long-term support.

Source: Aazan Habib, Paradigm Capital

3. Cocoa prices continue to surge.

Equities

1. The Nasdaq 100 has been trending within a rising wedge pattern and is testing the upper boundary, signaling potential resistance ahead.

2. Momentum stocks underperformed sharply on Monday.

3. Next, we have some sector updates.

• 2025 profit growth estimate:

Source: @markets Read full article

• Positioning by sector (with two examples below):

Source: Deutsche Bank Research

• Share buyback announcements:

Source: Deutsche Bank Research

• Percent of companies with EPS growth in Q3 by sector:

Source: BofA Global Research

• Earnings revisions for software and semis:

Source: Morgan Stanley Research; @WallStJesus

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4. S&P 500 at 7,100 by the end of next year? The options market sees a 16% probability of such an outcome.

Source: @markets Read full article

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5. The post-COVID growth in options trading has been remarkable.

6. S&P 500 forward earnings multiples have sharply diverged from real and expected inflation components of long-term interest rates.

Source: Alpine Macro

7. This chart illustrates the historical “Santa Claus rally” in equity markets across advanced economies.

Source: @JeffreyKleintop

Rates

1. The 10-year Treasury yield has been more sensitive to economic surprises.

Source: BlackRock Investment Institute

2. The 20+ Year Treasury Bond ETF (TLT) is testing initial resistance.

3. BofA’s private clients continue to rotate from T-bills to notes.

Source: BofA Global Research

4. Historically, returns are greater further out the curve as the Fed’s rate cut cycle progresses. But the journey will not be smooth given economic resilience.

Source: Deutsche Bank Research Read full article

Global Developments

1. Institutional investors are increasingly upbeat on the US dollar.

Source: @markets Read full article

2. Wider interest rate differentials have supported the dollar. But will resistance hold?

Source: MRB Partners

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Food for Thought

1. Computing power trends for training AI models:

Source: ING Read full article

2. Passengers using Waymo’s driverless ride-hailing service:

Source: @owasow.bsky.social Read full article

3. Number of candidates taking the CFA exams:

Source: @financialtimes Read full article

4. The average number of people per US household:

Source: Torsten Slok, Apollo

5. Generational perspectives on financial success in America:

Source: Visual Capitalist Read full article

6. Gasoline prices by state:

Source: Visual Capitalist Read full article

7. WNBA Finals viewership:

Source: r/DataIsBeautiful

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