December 31, 2024December 31, 2024 by The Daily Shot Editor: Lev Borodovsky

Credit card defaults surged in 2024

The Daily Shot: 31-Dec-24
• The United States
• Canada
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Alternatives
• Credit
• Rates
• Global Developments
• Food for Thought

The United States

1. Despite higher mortgage rates, US pending home sales stayed above 2023 levels in November for the third straight month as homebuyers take advantage of increased inventories.

2. The Dallas Fed’s regional manufacturing index shifted into growth territory for the first time since early 2022.

Price indicators eased.

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3. Credit card defaults surged in 2024.

Source: @financialtimes Read full article

4. The US net international investment position is approaching a $25 trillion deficit. The widening gap is driven by a combination of higher inbound investment relative to outbound investment — funding the trade deficit — and the outperformance of the US equity market, …

Source: BEA

… which has inflated the value of foreign-held US assets (see portfolio investment).

Source: BEA

5. The US “twin deficit” (budget deficit and current account deficit as a percentage of GDP) stands out among major economies. This dual imbalance underscores a key vulnerability, as reliance on foreign capital to fund government spending and trade deficits leaves the US exposed to shifts in global investor confidence or financial conditions.

Source: Simon White, Bloomberg Markets Live Blog

Canada

1. Consumer confidence continues to soften.

Source: @economics Read full article

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2. Canada’s yield curve has bull-steepened in recent days.

Europe

1. Spain’s consumer inflation unexpectedly accelerated in December.

Source: @economics Read full article

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2. It’s been a tough year for French stocks.

Source: @financialtimes Read full article

3. A key Swiss leading indicator is rolling over.

• Switzerland’s sight deposits have dropped to a multi-year low as the central bank avoids foreign currency interventions aimed at weakening the franc.

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3. Sweden’s household lending growth is starting to recover.

4. Here is a look at life expectancy in the EU.

Source: Eurostat Read full article

Asia-Pacific

1. Japan’s housing starts remain depressed.

2. AUD/USD is trading near multi-year lows, …

… with speculative accounts boosting their bets against the Aussie dollar.

• Bets against the Kiwi dollar are at extreme levels.

China

1. The 10-year government bond yield dipped below 1.7% for the first time.

2. Beijing is holding the line on USD/CNY at 7.30.

3. According to the official PMI report, growth in China’s factory activity slowed further, but new orders strengthened.

Source: @WSJ Read full article

– Falling output prices signal further disinflationary pressures.

Source: Capital Economics

• The non-manufacturing PMI surprised to the upside.

Source: @economics Read full article

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4. Real estate clearance times remain high.

Source: PGM Global

5. Hong Kong’s export growth is slowing.

Emerging Markets

1. Brazil’s budget deficit was wider than expected.

• This chart illustrates the real’s underperformance in 2024.

Source: @markets Read full article

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2. Chile’s unemployment rate surprised to the downside, diverging from 2023 levels.

3. The Ukrainian hryvnia hit a record low vs. the US dollar.

Cryptocurrency

1. XRP and DeFi tokens pared their monthly gains versus top cryptos last week. Solana significantly underperformed in December.

Source: @TheTerminal, Bloomberg Finance L.P.

• 2024 was a strong year for cryptos, with XRP significantly outperforming.

Source: @TheTerminal, Bloomberg Finance L.P.

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3. Roughly one-third of the top 50 altcoins outperformed bitcoin over the past year.

Source: Blockchain Center

4. The total crypto market cap remains above $3 trillion …

… but returned below $1 trillion excluding BTC and ETH.

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5. The Crypto Fear & Greed Index continues to decline from “extreme greed” territory.

Source: Alternative.me

Commodities

1. A sustained rise in commodity prices may require a turnaround in China’s credit impulse.

Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital

2. Sugar futures have erased all their September gains.

3. Speculators continue to boost their bets on Chicago cattle futures.

4. Hog futures are rolling over.

Energy

1. Crude oil prices have been climbing as the year-end approaches.

Source: @markets Read full article

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2. Traders are increasing their bets on crude oil futures.

Source: @markets Read full article

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3. The number of active US shale companies has declined in recent years, largely because of consolidation.

Source: @WSJ Read full article

• A handful of companies dominate the majority of oil production in the Permian.

Source: @WSJ Read full article

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4. US natural gas futures continue to climb, driven by cold weather forecasts.

Source: NOAA

Equities

1. The Nasdaq 100 is testing support at the 50-day moving average.

2. Declining shares significantly outnumbered advancing shares for the second consecutive trading session.

3. Very few S&P 500 members outperformed the index in December.

Source: BofA Global Research; @MikeZaccardi

• The blue line below illustrates the average performance of S&P 500 stocks this month.

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4. This chart compares the performance of the S&P 500 and S&P 600 (small caps) during the 2016 and 2024 presidential election periods.

• Tesla has been the clear standout among the “Mag7” stocks since the US election, contributing over 61% of the index movement.

Source: Tatiana Darie

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5. Speculative stocks struggled in December.

6. The negative correlation between bond yields and the S&P 500 could reassert itself if the 10-year Treasury yield rises above 5%.

Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital

7. The S&P 500 has grown increasingly concentrated recently, not only in terms of member weights but also across economic metrics.

Source: J.P. Morgan Asset Management

Here is a look at concentration drivers by sector.

Source: @bespokeinvest

Alternatives

1. Median private equity EV/EBITDA multiples climbed to 15.6x in 2024, narrowing the valuation gap with public markets. Smaller private companies continue to show a steep valuation discount compared to larger peers.

Source: VRC

2. The GP-led secondary market is booming.

Source: PitchBook

3. Funds are taking longer to close across the board.

Source: PitchBook

4. Valuations are generally higher at software startup ventures with male CEOs vs. those with female CEOs.

Source: Carta

Credit

1. The US high-yield market has seen an uptick in M&A issuance alongside a boom in refinancing. However, some credit strategists see risks of regulatory uncertainty and potential credit spread widening in late 2025, according to PitchBook.

Source: PitchBook

2. This chart provides an overview of total US outstanding debt securities, categorized by type.

Source: Deutsche Bank Research

Rates

1. Treasury auction sizes have increased this year.

Source: Torsten Slok, Apollo

2. US households and institutional money such as pension funds and insurance companies are buying Treasuries. According to Apollo, these yield-sensitive buyers could stop buying Treasuries if interest rates decline too much.

Source: Torsten Slok, Apollo

3. The Global Financial Crisis led to significant deleveraging in the private sector, particularly within households and financial institutions, while the government increased borrowing substantially to support the economy through fiscal stimulus.

Source: Deutsche Bank Research

Global Developments

1. Traders are increasingly betting on the US dollar, with CME futures positioning now at its highest level since early 2016. Is the long-dollar trade becoming stretched?

2. Goldman anticipates central banks will adopt a more dovish stance than the market expects.

Source: Goldman Sachs; @MikeZaccardi

3. Synchronized global easing typically boosts global manufacturing conditions.

Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital

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Food for Thought

1. The AI chip market:

Source: @financialtimes Read full article

2. Top workplace uses for generative AI worldwide:

Source: @genuine_impact

3. Google search volume trends for major social media platforms:

Source: @chartrdaily

4. Largest religious group by county:

Source: US Religion Census

5. Federal employment as a percentage of total US nonfarm payrolls:

Source: Wells Fargo Securities

6. Most played openings at Chess Olympiad 2024:

Source: r/DataIsBeautiful

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Happy New Year!