The Daily Shot: 29-Jan-25
• The United States
• Canada
• The Eruozone
• Asia-Pacific
• India
• Cryptocurrency
• Commodities
• Energy
• Equities
• Rates
• Global Developments
• Food for Thought
The United States
1. The Conference Board’s consumer sentiment indicator declined again this month.
• The labor differential index declined, indicating that Americans see fewer job opportunities.
Source: @economics Read full article
• Purchase intentions for homes and vehicles declined sharply.
Fewer consumers expect to take a vacation.
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2. Durable goods orders fell in December, …
… driven by weak aircraft orders.
However, excluding transportation, orders increased, …
… with capital goods orders exceeding expectations.
Source: @economics Read full article
This chart shows real capital goods orders (level).
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3. The Richmond Fed’s regional report indicated that the manufacturing downturn eased this month.
• This map shows the Richmond Fed’s district.
• Factories started hiring.
• More companies are boosting wages.
4. The regional Fed reports point to a sharp rebound in factory activity at the national level (ISM) in January.
Source: Goldman Sachs; @MikeZaccardi
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5. Home prices continued to rise in November.
– Case-Shiller:
– FHFA:
Source: @WSJ Read full article
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6. The Atlanta Fed’s GDPNow model raised its Q4 growth estimate to 3.2% …
Source: Federal Reserve Bank of Atlanta
… as inventory destocking slowed.
Source: @TheTerminal, Bloomberg Finance L.P.
7. The market assigns a zero probability to an FOMC rate cut today.
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Canada
1. The market expects the BoC to cut rates today.
Economists see a total of three rate cuts this year. The market agrees.
Source: @TheTerminal, Bloomberg Finance L.P.
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2. The 2-year yield hit its lowest level since 2022.
3. The loonie remains range-bound.
4. Canadian stocks are not cheap, but valuations remain reasonable compared to historical levels.
5. Consumer confidence is rebounding.
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The Eruozone
1. Stocks continue to rally.
2. French consumer confidence improved more than expected this month.
3. Spain’s unemployment rate reached its lowest level since 2008 in December.
4. Will German bankruptcies peak as borrowing costs turn lower?
Source: @JeffreyKleintop
• The German-US 2-year yield spread held support with improving momentum.
Source: Aazan Habib, Paradigm Capital
• Here is a look at political attitudes among AfD and all German voters.
Source: The Economist Read full article
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5. European container rates from Asia have declined this year.
Source: @TheTerminal, Bloomberg Finance L.P.
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Asia-Pacific
1. Japan’s consumer confidence has been rolling over.
2. Here is a look at South Korea’s oil purchases.
Source: @SPGCIOil
3. Next, we have some updates on Australia.
• While the headline inflation has moved higher, the core CPI continues to moderate.
– Monthly CPI:
– Quarterly CPI (full set):
Source: Reuters Read full article
• The market-based probability of a February RBA rate cut has risen above 90%.
• Bond yields dropped.
• AUD/USD held resistance at the 50-day moving average.
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India
1. Capital Economics expects the RBI to cut rates substantially this year.
Source: Capital Economics
2. Who supplies India with crude oil?
Source: @heysambit, @SPGlobal
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Cryptocurrency
1. Here is a timeline of crypto developments over the past year and what lies ahead.
Source: Deutsche Bank Research
2. The Crypto Fear & Greed Index declined from “extreme greed” territory over the past week.
Source: Alternative.me
3. Open interest in BTC put and call options expiring January 31 are roughly balanced at the $100K price level. Puts dominate below $100K.
Source: @glassnode
4. US spot-bitcoin ETFs experienced outflows as BTC briefly dipped below $100K on Monday.
Source: @glassnode
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Commodities
1. Will copper catch up to gold’s rally?
Source: Aazan Habib, Paradigm Capital
• The copper curve remains deeply in contango, reflecting skepticism about China’s growth outlook.
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2. Cattle futures are surging.
Source: barchart.com Read full article
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3. US egg prices hit another record high.
Source: ABC News Read full article
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Energy
1. Energy market bets on surging demand from AI activity have been disrupted by DeepSeek’s demonstration of building and running powerful AI models with significantly lower energy requirements.
• Pipelines and energy infrastructure:
Source: @WSJ Read full article
• Natural gas:
Source: NGI Read full article
• Uranium:
Source: mining.com Read full article
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2. BMI does not see crude oil prices rising this year.
Source: BMI, Fitch Solutions Macro Research
3. The LNG market is expected to be well-supplied starting in 2027.
Source: @business Read full article
4. The summer-winter European gas spread has surged as Germany’s proposed storage subsidies drive up summer prices.
Source: @markets Read full article
Source: Reuters Read full article
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Equities
1. Investors re-entered tech on Tuesday after Monday’s AI-fueled rout.
Source: @markets Read full article
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2. The Russell 2000 continues to encounter resistance.
3. The dispersion of S&P 500 member returns remains high.
• Correlations are low both in the US and Europe.
Source: Goldman Sachs; @patrick_saner
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4. As noted in the energy section, the DeepSeek news has prompted a reassessment of AI-driven power demand.
Source: @technology Read full article
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5. According to MRB Partners, any rerating in S&P 500 valuations toward its historical norm could weigh heavily on prospective prices, especially if real earnings growth were simultaneously tepid.
Source: MRB Partners
• Below are sector valuations relative to the past decade.
Source: Capital Economics
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6. Here are earnings growth expectations for the Mag-7 compared to the previous five and ten years.
Source: Deutsche Bank Research
7. The absence of short sellers presents a risk to the market.
Source: Simon White, Bloomberg Markets Live Blog
8. Here is a look at the S&P 500 moves on FOMC days.
Source: Piper Sandler; @markets Read full article
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Rates
1. JP Morgan’s clients haven’t been this bullish on Treasuries since 2010.
Source: @markets Read full article
• Options markets signal improving sentiment toward long-term Treasuries.
Source: @TheTerminal, Bloomberg Finance L.P.
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2. On average, Treasury yields have fallen on FOMC days during this cycle.
Source: Deutsche Bank Research
3. The share of Treasury bills in total outstanding US debt is expected to decrease.
Source: Goldman Sachs; @MikeZaccardi
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Global Developments
1. Here is a look at AQR’s expected real returns across major assets.
Source: AQR Read full article
• The expected real returns for bonds and cash have risen sharply since 2022, while equities have remained constant, implying a world of compressed risk premia, according to AQR.
Source: AQR Read full article
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2. Fund managers increasingly see “no landing” for the global economy over the next 12 months.
Source: BofA Global Research
Source: BofA Global Research
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3. The global M&A cycle has troughed.
Source: Goldman Sachs
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Food for Thought
1. ShiIfting trends in the global working-age population:
Source: The Economist Read full article
2. AI “labor” costs drastically undercut human labor across industries.
Source: BofA Global Research
3. Cost of cybercrime:
Source: BofA Global Research
4. Growth in plastic surgery:
Source: The Economist Read full article
5. Population changes by state:
Source: @StatisticUrban
6. How Americans view the morality of professions:
Source: @chartrdaily
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