The Daily Shot: 10-Jan-25
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. Let’s begin with the labor market.
• Initial jobless claims started 2025 at a multiyear low.
Although weekly seasonally adjusted data can be unreliable, the sharp drop at the beginning of the year is noteworthy.
Source: Reuters Read full article
• The December ADP private employment report was weaker than expected.
Source: CNBC Read full article
– The healthcare sector continued to add jobs, …
… while several other sectors faced weak employment conditions.
Business services:
Retail and logistics:
Manufacturing:
– Here are the December changes by sector.
• Larger firms have been driving private job growth, while small business employment has plateaued (red line).
Source: Oxford Economics
• US labor force growth has stalled.
Source: Capital Economics
• Layoff announcements were relatively low in December.
• Job growth is expected to cool further this year.
Source: Truist Advisory Services
• Small business hiring intentions suggest stronger job gains in the first quarter.
Source: Pantheon Macroeconomics
• What should we expect from the official December jobs report today?
– Alternative measures of employment growth:
Source: Goldman Sachs; @MikeZaccardi
– Oxford Economics (185k):
Source: Oxford Economics
– Could another stronger-than-expected jobs report drive yields significantly higher?
Source: Simon White, Bloomberg Markets Live Blog
2. BofA customer data shows an increase in wages, particularly for low-income households, which helped slow the growth of household debt as a share of income. (2 charts)
Source: Bank of America Institute
Source: Bank of America Institute
• Here is a look at wage growth for job stayers and switchers.
Source: @TheTerminal, Bloomberg Finance L.P.
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3. The current US inflation trajectory closely mirrors the patterns of the 1970s.
Source: @JeffreyKleintop
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Canada
1. Canada’s trade surplus with the US expanded in November, while its deficit with the rest of the world grew.
Source: @markets Read full article
2. Is inflation set to reaccelerate? Here’s a comparison of Canada’s CPI with the 1970s trend.
Source: @JeffreyKleintop
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The United Kingdom
1. The pound remains under pressure.
2. The UK bond selloff has been notably more severe than in other advanced economies.
Source: Capital Economics
3. Bond investors are increasingly worried about the UK’s fiscal situation, …
Source: BofA Global Research
… and rising interest expenses further strain the budget.
Source: @markets Read full article
• The UK is the most reliant on foreign capital among G10 nations.
Source: Deutsche Bank Research
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4. UK firms increased their projections for output price gains and consumer inflation.
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The Eurozone
1. Here are the contributions to Germany’s industrial production slump.
Source: @DanielKral1, @OxfordEconomics
2. Euro-area retail sales barely budged in November, with growth coming in below forecasts.
3. BCA Research expects a rise in the Euro area credit impulse to support economic growth next year.
Source: BCA Research
4. Here is an overview of the contributions to electricity generation in Germany, France, Italy, and Spain.
Source: @DanielKral1, @OxfordEconomics
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Europe
1. The Swiss central bank posted strong profits from its foreign reserve portfolio and will distribute funds to the government.
Source: Zoe Schneeweiss, @TheTerminal, Bloomberg Finance L.P. Read full article
2. The Czech industrial production is rolling over, exacerbated by the manufacturing slump in Germany.
3. This map illustrates the share of people in Europe ordering goods or services online for private use.
Source: Eurostat Read full article
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Japan
1. The JGB rout continues.
2. Japan’s household spending in November was below 2023 levels but exceeded expectations.
3. Japan’s leading index has been deteriorating.
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Asia-Pacific
1. Taiwan’s exports hit a record high for the month of December.
Source: @technology Read full article
• Surplus with the US surged.
Source: @economics Read full article
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2. Australia’s November household spending increase was below estimates.
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China
1. Bond yields increased as the PBoC halted debt buying.
Source: @markets Read full article
USD/CNY found anotther plateau.
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2. Here is the progression of economists’ forecasts for China’s GDP growth.
Source: @WSJ Read full article
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Emerging Markets
1. Brazil’s retail sales declined more than expected in November.
• The debt-to-GDP ratio is expected to keep rising.
Source: Wells Fargo Securities
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2. Argentina’s factory output continues to rebound.
3. Mexico’s headline inflation declined further, but the core CPI edged higher.
4. South Africa’s manufacturing production remains well below pre-COVID levels.
5. EM stocks have been under pressure.
• The second panel below shows EM regional ETF flows.
Source: JP Morgan Research; @WallStJesus
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Cryptocurrency
1. It has been a tough week for cryptos so far, with DeFi tokens underperforming.
Source: @TheTerminal, Bloomberg Finance L.P.
2. The Crypto Fear & Greed Index had a sharp decline to “neutral” territory.
Source: Alternative.me
3. Bitcoin’s price is increasingly stretched based on its market value to realized value (MVRV) deviations.
Source: @glassnode
• Historically, BTC had only spent about 5% of trading days above the 3.2 MVRV level before pullbacks occurred.
Source: @glassnode
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4. ETH saw an uptick in long liquidations after the crypto dipped below $3,500.
Source: Coinglass
5. Here is a look at key sources of BTC demand in Q4.
Source: @KaikoData
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Energy
1. NYMEX crude oil futures continue to hold resistance at the 200-day moving average.
Source: @TheTerminal, Bloomberg Finance L.P.
2. Asian LNG prices remain elevated relative to US natural gas, maintaining a significant premium despite both markets stabilizing from 2022 peaks
Source: @TheTerminal, Bloomberg Finance L.P.
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Equities
1. The S&P 500 has delivered strong performance over the past two years.
Source: Goldman Sachs; @MikeZaccardi
2. Market sentiment suggests the current rally may be overextended, with traders, advisors, and consumer confidence metrics surpassing historical averages.
Source: BCA Research
3. The steepening 10-2 year TIPS yield spread (real rates) suggests continued US corporate earnings growth.
Source: Alpine Macro
4. Bank stocks continue to underperform the S&P 500 since the SVB collapse.
Source: Torsten Slok, Apollo
5. This chart illustrates corporate cash levels as a percentage of current assets across sectors.
Source: J.P. Morgan Asset Management
6. Reverse stock splits have become far more common in recent quarters.
Source: Wall Street Horizon Read full article
7. Small caps’ market share is near multi-decade lows.
Source: Jefferies; @Callum_Thomas
8. Most-shorted tech stocks tumbled this week.
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Credit
1. The ratio of high-yield to investment-grade spreads is near multi-year lows, indicating heightened risk appetite.
2. Rising bankruptcies suggest a potential widening of high-yield spreads.
Source: Simon White, Bloomberg Markets Live Blog
3. Leveraged loan inflows jumped last week as investors anticipate rates to stay elevated (loans typically feature floating coupons). (2 charts)
Source: BofA Global Research
Source: BofA Global Research
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4. Unrealized losses make up 15% of bank equity capital.
Source: Torsten Slok, Apollo
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Rates
1. USD-denominated money market fund assets are nearing $7 trillion.
2. The US 10-year Treasury yield is in the sixth year of the third great bond bear market, climbing from historic lows in 2020 to near the long-term average of 4.75%.
Source: BofA Global Research
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Global Developments
1. Here is an overview of key events in 2024 mapped alongside the MSCI World Index.
Source: Barclays Research
2. Unlike past trends where fiscal deficits rose during downturns, current deficits remain elevated despite benign economic conditions.
Source: Simon White, Bloomberg Markets Live Blog
3. All major leveraged fund categories delivered positive returns last year. Vol-target funds fared the best, while CTAs and risk parity funds lagged.
Source: Barclays Research
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Food for Thought
1. Projected US population growth:
Source: J.P. Morgan Asset Management
2. OpenAI’s valuation:
Source: @chartrdaily
3. Global food crises:
Source: Reuters Read full article
4. Largest health insurers by state:
Source: Visual Capitalist Read full article
5. Bank of Greenland stock soared on speculation about US interest in the territory.
Source: BofA Global Research
6. Flooded Christmas tree farms:
Source: @WSJ Read full article
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Have a great weekend!
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