The Daily Shot: 11-Dec-24
• The United States
• The Eurozone
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Alternatives
• Credit
• Global Developments
• Food for Thought
The United States
1. The NFIB Small Business Sentiment Index surged following the elections.
Source: @economics Read full article
• The uncertainty index eased.
• Forward-looking indicators have diverged from current conditions.
Source: @bespokeinvest
• Below are some key forward-looking trends.
– Sales expectations:
– Price plans:
– Hiring plans:
– Compensation plans:
– CapEx plans:
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2. Q3 unit labor cost gains were revised lower, offering a positive signal for the Fed’s inflation fight.
3. Public sector productivity has lagged behind the private sector.
Source: BofA Global Research
4. Beijing is threatening to weaken the yuan in response to potential tariff increases from Trump, driving the dollar higher.
Source: Reuters Read full article
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5. Companies have become more upbeat about the consumer.
Source: Goldman Sachs; @MikeZaccardi
6. Nomura expects November core inflation to remain elevated, roughly matching the October figure (month-over-month).
Source: Nomura Securities
• The core goods CPI is expected to rise, boosted by apparel.
Source: Nomura Securities
• Owners’ equivalent rent CPI is seen edging lower.
Source: Nomura Securities
• Here is the forecast for the supercore CPI.
Source: Nomura Securities
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The Eurozone
1. The relative underperformance of French stocks this year has been unprecedented in recent decades.
Source: Goldman Sachs; @BlakeMillardCFA
2. Italian industrial production was unchanged in October.
• Dutch factory output declined again.
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Europe
1. Sweden’s monthly GDP indicator fell for the second consecutive month, …
… driven by declines in household consumption and private sector output.
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2. Norway’s underlying inflation moved higher last month.
3. Europe’s influence in the iShares MSCI ACWI ETF has declined while the US increased significantly.
Source: @Todd_Sohn
• The number of Europe-focused ETF launches has stalled in recent years.
Source: @Todd_Sohn
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4. Here is a look at regional employment rates across Europe.
Source: Eurostat Read full article
5. Next, we have some data on foreign-controlled enterprises in the EU, showcasing their contributions to value added, employment, and enterprise count, with notable variations across member states.
Source: Eurostat Read full article
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Asia-Pacific
1. Japan’s November PPI surprised to the upside.
2. New Zealand’s manufacturing output is nearing the COVID-shock lows.
• The continued fall in New Zealand job vacancies points to a rise in unemployment above 5%.
Source: Capital Economics
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China
1. Bond yields continue to sink.
2. Retail and real estate revenue improved in recent months while services weakened.
Source: China Beige Book
• Manufacturing export orders rose sharply in November, possibly due to front-loading amid US tariff threats. (2 charts)
Source: China Beige Book
Source: China Beige Book
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3. China’s trade surplus in medical devices has widened in recent years.
Source: Gavekal Research
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Emerging Markets
1. Brazil’s bond yields tumbled on Tuesday.
Source: @WSJ Read full article
• Core inflation (2nd panel) is holding near 4%.
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2. Mexico’s consumer confidence declined last month.
3. Next, we have some updates on Chile.
• CPI:
• Business confidence:
• Copper production (well above 2023 levels):
• Vehicle sales (below last year’s levels):
• Trade balance (well below forecasts):
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4. South Africa’s manufacturing production edged higher in October, …
… while mining output declined.
• Business confidence surged last month.
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5. Turkey’s industrial production eased in October.
6. Ukraine’s inflation is accelerating again.
7. Vietnam’s car sales are running at multi-year highs.
8. This chart shows GDP per capita trends in China, Latin America, and Sub-Saharan Africa.
Source: @WSJ Read full article
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Cryptocurrency
1. Here is a look at bitcoin supply and holdings distribution across various entities, showing individuals dominating with nearly 70% ownership, alongside the growing influence of ETFs, funds, and companies in bitcoin ownership since 2018.
Source: @WSJ Read full article
2. The iShares Bitcoin Trust ETF (IBIT) surpassed $50 billion in assets in just 227 days, achieving this milestone five times faster than the previous record-holder, IEMG, which took 1,323 days. IEFA and VOO reached similar levels in comparable time frames.
Source: @EricBalchunas, @JackiWang17
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Commodities
1. Gold is performing better than it did after the 2016 US elections.
2. The lithium market oversupply is projected to persist through 2027.
Source: Reuters Read full article
3. Corn futures broke above short-term resistance with improving momentum.
4. Cotton futures are trading near the lowest level since 2021.
5. The front-month Arabica coffee futures contract reached an all-time high.
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Equities
1. Near-term risk appetite and outlook for US equities among institutional investors remain elevated.
Source: S&P Global PMI
• What are the expected drivers of returns over the next 30 days?
Source: S&P Global PMI
• Here is the near-term sector outlook.
Source: S&P Global PMI
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2. US equity sentiment appears stretched.
Source: BofA Global Research
3. Small caps are underperforming relative to their 2016 post-election gains.
• VIX is right on schedule.
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4. The breadth of S&P 500 earnings growth is projected to expand significantly next year.
Source: BofA Global Research
5. Insiders have been selling.
Source: Barron’s
6. Here are the top five contributors to the year-to-date US equity market performance.
Source: Morningstar Read full article
7. A rotation from US momentum stocks to China?
Source: Chris Murphy, Susquehanna International Group
8. Will the US trade war escalation pressure stocks?
Source: Deutsche Bank Research
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Alternatives
1. Hedge funds’ returns have fallen short of wealth managers’ projections.
Source: @wealth Read full article
2. November was a slow month for PE and VC deals.
Source: S&P Global Market Intelligence
4. The number of tender offers administered on Carta reached the highest level since Q2 2022. Maturing companies use these liquidity events (as early-stage investors/employees sell off their shares) to retain and reward talent as they wait for IPO and M&A opportunities. According to Carta, later-stage tender offers are now oversubscribed on average.
Source: Carta
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Credit
1. High-yield new-issue volume increased last week as the window for deal-making this year narrows.
Source: PitchBook
2. Year-to-date US bankruptcies have climbed to their highest level since 2010.
Source: S&P Global Market Intelligence
3. Next, we have some updates on middle-market and direct lending.
• This chart shows the distribution of outstanding middle-market loans across various sectors.
Source: Fitch Ratings
• The 2023 banking stress led to a reduction in Cov-Lite middle-market deals.
Source: Fitch Ratings
• Middle-market LBO leverage has been rebounding this year.
Source: Fitch Ratings
• Equity contributions for middle-market deals have been trending higher in recent years and remain above those for large corporate deals.
Source: Fitch Ratings
• Here is the middle-market loan maturity profile.
Source: Fitch Ratings
• Default rates in middle-market debt monitored by Fitch have been increasing.
Source: Fitch Ratings
• Fitch Privately Monitored Ratings (PMR) Portfolio shows trends in upgrade and downgrade counts. The second chart highlights B/CCC rating transitions.
Source: Fitch Ratings
• Middle-market unitranche yields have been trending lower, driven by Fed rate cut expectations and narrower spreads.
Source: VRC
• Total private debt originations have been rising.
Source: VRC
• Broadly syndicated loans are often refinanced through direct loan deals, driven by strong demand for the direct lending asset class.
Source: VRC
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Global Developments
1. This chart shows government deficit and interest expense as a share of GDP across select countries.
Source: BofA Global Research
2. Here is a look at GDP impact scenarios from potential US blanket tariffs.
Source: Oxford Economics
3. Israel’s consumer confidence has deteriorated to its lowest level since the initial COVID shock, driven by ongoing conflict and political uncertainty.
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Food for Thought
1. Syria’s areas of control:
Source: The Economist Read full article
2. Decline in vote share for governing parties in developed nations:
Source: @financialtimes Read full article
3. The US 65+ age cohort is expected to reach 23% of the total population by 2050.
Source: Torsten Slok, Apollo
• The number of workers contributing to the Old-Age, Survivors, and Disability Insurance (OASDI) program is growing slower than the number of beneficiaries receiving monthly payments.
Source: Torsten Slok, Apollo
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4. Declining joblessness gap between college graduates and non-degreed young workers:
Source: S&P Global Market Intelligence
5. Growth in higher education attainment among Americans aged 25 and older:
Source: S&P Global Market Intelligence
6. US box office sales:
Source: Wall Street Horizon Read full article
7. Perceptions of what qualifies as art among Britons:
Source: YouGov Read full article
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