The Daily Shot: 02-Jan-25
• The United States
• Europe
• Asia-Pacific
• China
• India
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. Let’s begin with the housing market.
• Home prices continued to rise in October (2 charts), …
… though year-over-year gains have decelerated.
• Affordability remains a challenge, as the monthly mortgage payment for a median-priced home remains above $2,000.
Source: @TheTerminal, Bloomberg Finance L.P.
• Shares of homebuilders have sold off sharply.
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2. A Dallas Fed survey of Texas retailers showed a surge in regional sales.
3. Financial conditions have tightened to levels more characteristic of the first half of 2024.
4. The Citi Economic Surprise Index has declined in recent weeks, signaling upside potential for Treasuries.
• Here are the contributions to the Bloomberg Economic Surprise Index, with recent declines driven mostly by survey data.
Source: @TheTerminal, Bloomberg Finance L.P.
This chart highlights the current levels of the components within the Bloomberg Economic Surprise Index.
Source: Simon White, Bloomberg Markets Live Blog
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5. Economists remain optimistic about US GDP growth in 2025, fueled by strong consumer spending.
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Europe
1. French bond spreads remain elevated amid budget impasse.
2. Could the upcoming elections in Germany lead to a coalition between the Union, SPD, and FDP?
Source: Pantheon Macroeconomics
3. How did major European currencies fare against the euro in 2024?
4. Are markets too dovish on the ECB policy rate trajectory?
Source: Pantheon Macroeconomics
5. Western European defense spending has room to go higher.
Source: TS Lombard
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Asia-Pacific
1. South Korea’s exports and trade surplus were higher than expected in December.
• South Korea’s manufacturing PMI returned to contraction territory, …
Source: S&P GlobalĀ PMI
… with the outlook deteriorating amid heightened political uncertainty.
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2. Taiwan’s manufacturing activity accelerated in December.
Source: S&P GlobalĀ PMI
3. Australia’s housing prices declined for the first time in almost two years.
Source: Reuters Read full article
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China
1. The stock market started the year with a sharp decline.
2. Bond yields continue to sink.
3. The renminbi is trading at levels weaker than Beijing prefers.
4. S&P Global’s manufacturing PMI indicated a slowdown in factory activity growth in December.
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India
1. The rupee continues to hit record lows vs. the dollar.
Source: Reuters Read full article
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2. The output of India’s eight core industries remained well above 2023 levels in November.
Here is growth by industry.
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Emerging Markets
1. Let’s begin with EM Asia PMI trends.
• ASEAN (modest growth):
Source: S&P GlobalĀ PMI
• Indonesia and Thailand (back in growth territory):
Source: S&P GlobalĀ PMI
Source: S&P GlobalĀ PMI
• The Philippines (accelerating):
Source: S&P GlobalĀ PMI
• Malaysia (soft):
Source: S&P GlobalĀ PMI
• Vietnam (stalling):
Source: S&P GlobalĀ PMI
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2. Brazil’s bond yields and inflation expectations (2nd chart) continue to rise, …
… driven by growing investor concerns over the country’s fiscal situation.
Source: @markets Read full article
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3. 2024 proved difficult for the Mexican peso, as the dollar surged nearly 23% against it.
Source: Reuters Read full article
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4. Increased trade barriers could weigh on EM currency performance.
Source: Oxford Economics
5. Next, let’s take a look at the 2024 performance data.
• Currencies:
• Bond yields:
• EM equity ETFs (dollar-denominated):
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Cryptocurrency
1. Letās start with the 2024 performance of selected cryptocurrencies.
2. BTC/USD is declining from overbought levels.
3. The aggregate cost basis of short-term BTC holders is around $86K
Source: @glassnode
4. There is a wide price range of low supply between $70K and $88K in BTC/USD. “Low volume” zones result from a previous breakout or breakdown and tend to get filled quickly.
Source: @glassnode
5. Several major altcoins have lost intermediate-term momentum vs. BTC in recent weeks, although relative strength remains intact.
Source: @TheTerminal, Bloomberg Finance L.P., h/t @StocktonKatie
6. ETH/USD is also declining from overbought levels but remains in an uptrend.
7. The XRP/BTC price ratio appears stretched.
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Commodities
1. Grains are experiencing a rebound, with US corn futures rallying.
2. Here is a look at the 2024 performance across key commodity markets.
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Equities
1. The Nasdaq 100 is testing its 50-day moving average, a key technical support level.
2. Growth stocks have declined for four consecutive sessions.
3. US market concentration is not extreme compared to global peers.
Source: J.P. Morgan Asset Management
4. The composition of the S&P 500 has increasingly tilted toward innovation sectors, with growth coming at the expense of manufacturing. This shift reflects the broader transformation of the US economy toward technology and services.
Source: Goldman Sachs; @MikeZaccardi
5. The ratio of assets in bullish leveraged ETFs compared to bearish leveraged ETFs has exploded.
Source: SentimenTrader; @jasongoepfert
6. Here is a look at the performance attribution of the S&P 500 and S&P 600 (small caps) in 2024.
• Quarterly:
• Yearly:
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7. Analysts expect a rebound in small-cap earnings growth in 2025.
Source: J.P. Morgan Asset Management
8. Finally, we have some performance data for 2024.
• Sectors:
• Equity factors/styles:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. Corporate spreads remain very tight.
Source: J.P. Morgan Asset Management
2. This chart shows the 2024 performance across credit markets (total return).
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Rates
1. Letās start with the attribution of changes in Treasury yields.
– Q4:
– 2024:
• Below is the 2024 attribution broken down by term premium and risk-neutral yield.
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2. Here is the 10-year Treasury total return around the start of Fed cutting cycles.
Source: J.P. Morgan Asset Management
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Global Developments
1. BofA’s model indicates that the dollar is increasingly overvalued.
Source: @WSJ Read full article
2. This scatterplot shows economic vs. inflation surprises across developed markets.
Source: Oxford Economics
3. The risk of escalation between Israel and Iran or its proxies remains high, according to Alpine Macro.
Source: Alpine Macro
4. Finally, we have some performance data for 2024.
• Currencies:
• Bond yields:
• Equity indices:
• USD-denominated equity ETF:
• USD-denominated equity performance attribution:
Source: J.P. Morgan Asset Management
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Food for Thought
1. Optimism for 2025 by country:
Source: Visual Capitalist Read full article
2. Internet speeds in selected countries:
Source: r/DataIsBeautiful
3. Most US households now rely solely on wireless phones.
Source: @chartrdaily
4. TikTok influencer earnings distribution:
Source: @genuine_impact
5. Taylor Swift Eras Tour resale ticket prices by city:
Source: The Economist Read full article
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