The Daily Shot: 30-Dec-24
• The United States
• Europe
• Asia-Pacific
• China
• India
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Alternatives
• Credit
• Rates
• Food for Thought
The United States
1. Initial jobless claims remain low, staying roughly in line with 2023 levels.
2. Leading indicators suggest that rent inflation continues to moderate.
Source: Goldman Sachs; @MikeZaccardi
• Historically, inflation has risen roughly six months after the first Fed rate cut if the economy does not fall into a recession within a year of the cut. This implies that inflation could rise by the end of Q1 2025, potentially resulting in a pause in the Fed’s rate-cut cycle.
Source: BofA Global Research
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3. The trade deficit expanded in November as import growth outpaced exports.
Source: @TheTerminal, Bloomberg Finance L.P.
4. The US dollar has had a strong year, …
… though the 2016 post-election pattern suggests potential headwinds ahead.
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5. The market now expects less than 40 bps of Fed rate cuts in 2025.
Source: @TheTerminal, Bloomberg Finance L.P.
6. Insurance and taxes make up a growing share of mortgage payments.
Source: @WSJ Read full article
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Europe
1. China’s automakers are reducing prices on European exports to offset new EU tariffs and preserve market share.
Source: Goldman Sachs; @MikeZaccardi
2. Job vacancy rates in the EU remain elevated.
Source: Eurostat Read full article
3. France leads electricity exports in the EU, …
Source: @DanielKral1
… driven by strong nuclear output.
Source: @DanielKral1, @OxfordEconomics
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4. Here is a look at EU foreign direct investment holdings abroad vs. foreign holdings in the EU.
Source: Eurostat Read full article
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Asia-Pacific
1. Tokyo inflation accelerated further this month, but core inflation measures eased.
Source: Reuters Read full article
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2. Business surveys in South Korea plummet amid political turmoil.
• The South Korean won continues to weaken.
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China
1. China’s bonds have outpaced global peers this year …
Source: @markets Read full article
… as yields continue to decline.
• Beijing seeks to capitalize on this demand for government debt by issuing substantial amounts to finance stimulus programs.
Source: Reuters Read full article
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2. China’s year-over-year decline in industrial profits slowed in November, yet 2024 is on track to be the worst year for industrial profits in decades.
Source: Reuters Read full article
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3. The PBoC removed a record amount of liquidity from the one-year policy loan program, aiming to redirect monetary stimulus to other areas.
Source: @economics Read full article
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India
1. The rupee selloff accelerated last week. Will the RBI intervene?
Source: Reuters Read full article
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2. India’s foreign exchange reserves have been declining in recent months.
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Emerging Markets
1. Brazil’s bond yields continue to climb.
2. Argentina was compelled to sell a significant amount of its FX reserves due to higher demand for dollars.
Source: @markets Read full article
3. Economists continue to boost their forecasts for Chile’s CPI in 2025.
4. Turkey’s central bank has begun lowering interest rates.
Source: Reuters Read full article
• Economists have raised their inflation projections for Turkey in 2025.
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5. Thailand’s manufacturing output shrank in November relative to last year.
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Cryptocurrency
1. Political uncertainty in South Korea boosted the local bitcoin premium to global markets (Kimchi premium).
Source: @markets Read full article
2. Here is a look at cryptocurrency usage by age group in the US.
Source: @EmersonPolling
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Commodities
1. Historically, gold has provided short-term protection against geopolitical shocks.
Source: Alpine Macro
2. Cocoa futures saw a sharp decline last week after reaching record highs.
3. US wholesale egg prices reached a record high, driven by the impact of bird flu.
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Energy
1. Crude oil short-term volatility is near multi-year lows.
2. US natural gas futures are soaring amid forecasts of colder-than-normal weather in the East and Midwest.
Source: NOAA
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Equities
1. Market breadth remains weak, with fewer than 30% of S&P 500 members trading above their 50-day moving average.
2. Cyclical sectors continue to outperform.
3. Momentum stocks have performed well this year, but is the rally overextended?
Source: @markets Read full article
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4. Equity funds registered outflows last week.
Source: BofA Global Research; @WallStJesus
5. Investors have been exiting thematic ETFs over the past two years.
Source: @markets Read full article
6. Current S&P 500 valuations suggest limited upside potential.
Source: J.P. Morgan Asset Management
7. Analysts have been forced to dramatically increase their forecasts for US market gains this year.
Source: @markets Read full article
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Alternatives
1. Structured product issuance has been growing steadily.
Source: @financialtimes Read full article
2. The rate of hedge fund startups is slowing.
Source: @markets Read full article
3. Here is a look at the aggregate value of US VC-backed companies by unicorn status.
Source: @financialtimes Read full article
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Credit
1. Leveraged loan ETF inflows surged in 2024.
• Loan refinancing activity was strong this year.
Source: Moody’s Investors Service
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2. US CLO activity remained robust this year. Several early forecasts for 2025 expect volume (formation of new CLO vehicles excluding refinancings and resets of existing deals) to exceed $200 billion – an essential source of demand for leveraged loans, according to PitchBook.
Source: PitchBook
• Who owns CLOs?
Source: PineBridge Investments Read full article
• CLO correlations with other fixed-income categories are relatively low.
Source: PineBridge Investments Read full article
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Rates
1. Treasury yields continue to climb, …
… with the long bond hitting its highest level in 14 months.
• Real yields have also risen sharply.
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2. According to an investor survey by Alpine Macro, tariffs and greater fiscal spending could keep long-term Treasury yields elevated.
Source: Alpine Macro
3. The US Treasury is projected to reach the debt limit by mid-January 2025. By early to mid-summer, it is expected to exhaust emergency measures, posing a risk of default on Treasury debt and key entitlement payments such as Social Security and Medicare.
Source: @economics Read full article
Source: Reuters Read full article
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Food for Thought
1. Share of college graduates in each state:
Source: Visual Capitalist Read full article
2. Data centers’ water consumption for cooling:
Source: @business Read full article
3. EV market share in Norway:
Source: @BW Read full article
4. Composition of US defense spending:
Source: Wells Fargo Securities
5. Public opinion on actions of United Healthcare CEO’s killer by age group:
Source: @EmersonPolling
6. Average male height by country (age 19-30):
Source: r/dataisbeautiful
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