Leading indicators signal further slowdown in rent inflation

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  

——————–

 
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.
 

——————–

 
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  


Back to Index

 

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  

——————–

 
4. Here is a look at EU foreign direct investment holdings abroad vs. foreign holdings in the EU.
 
Source: Eurostat   Read full article  


Back to Index

 

Asia-Pacific

1. Tokyo inflation accelerated further this month, but core inflation measures eased.
 

 
Source: Reuters   Read full article  

——————–

 
2. Business surveys in South Korea plummet amid political turmoil.
 

 
The South Korean won continues to weaken.
 


Back to Index

 

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  

——————–

 
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  

——————–

 
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  


Back to Index

 

India

1. The rupee selloff accelerated last week. Will the RBI intervene?
 

 
Source: Reuters   Read full article  

——————–

 
2. India’s foreign exchange reserves have been declining in recent months.
 


Back to Index

 

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.
 

——————–

 
5. Thailand’s manufacturing output shrank in November relative to last year.
 


Back to Index

 

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  


Back to Index

 

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.
 


Back to Index

 

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  


Back to Index

 

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  

——————–

 
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  


Back to Index

 

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  


Back to Index

 

Credit

1. Leveraged loan ETF inflows surged in 2024.
 

 
Loan refinancing activity was strong this year.
 
Source: Moody’s Investors Service  

——————–

 
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  


Back to Index

 

Rates

1. Treasury yields continue to climb, …
 

 
… with the long bond hitting its highest level in 14 months.
 

 
Real yields have also risen sharply.
 

——————–

 
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  


——————–

Back to Index

 

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  
 

——————–


Back to Index