The Daily Shot: 31-Jan-25
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Japan
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
The United States
1. US Q4 GDP growth was below expectations but aligned with the Atlanta Fed’s GDPNow estimate (chart).
Source: @axios Read full article
• Consumer spending accelerated, driven by households rushing to front-run tariffs.
• Business investment weighed on Q4 GDP growth, as Boeing strike disruptions impacted business equipment spending.
• After two consecutive quarterly declines, housing investment rebounded.
• Surprisingly, net exports contributed positively to growth.
• As we saw yesterday (chart), destocking dampened growth last quarter.
• Domestic demand growth remained robust (2 charts).
Source: @TheTerminal, Bloomberg Finance L.P.
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2. Initial jobless claims hit a multi-year low last week.
Source: Reuters Read full article
This chart shows the trend in continuing jobless claims.
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3. The stock market is pricing in a sharp rebound in US factory activity.
Source: @TheTerminal, Bloomberg Finance L.P.
4. Without seasonal adjustments, pending home sales dropped to their lowest level since the National Association of REALTORS began reporting the index in 2001.
• Rising mortgage rates suggest ongoing weakness in pending home sales, …
Source: Pantheon Macroeconomics
… which, in turn, signals softness in existing home sales.
Source: Pantheon Macroeconomics
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5. Household wealth has grown since the financial crisis, while debt relative to net worth has declined.
Source: BlackRock Investment Institute
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Canada
1. The loonie dropped to the lowest level since 2020 on tariff concerns.
Source: BBC Read full article
The cost of hedging against CAD downside risks has surged.
• 1- week risk reversal:
• 1-week implied vol:
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2. Bond yields continue to sink.
3. The S&P/TSX Composite hit a record high, …
… boosted by mining stocks.
Source: Reuters Read full article
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4. Here is a breakdown of Canada-US trade by category.
Source: @financialtimes Read full article
5. Small Canadian exporters are becoming nervous.
Source: CFIB
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The United Kingdom
1. Stocks continue to surge.
2. Mortgage approvals inched higher in December.
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The Eurozone
1. The ECB delivered another rate cut as economic growth stalls.
Source: @financialtimes Read full article
• Economists (chart below) and the market (2nd chart) expect three more ECB rate reductions this year.
Source: @TheTerminal, Bloomberg Finance L.P.
Source: @TheTerminal, Bloomberg Finance L.P.
• The market has repriced the ECB rate trajectory lower.
• The euro and bond yields declined.
• Stocks continue to surge, …
…. with banks outperforming.
– Unlike in the US, European growth stocks have been underperforming value.
Source: BofA Global Research
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2. As noted yesterday, Spain’s Q4 GDP growth surpassed expectations, with Portugal also posting strong growth.
However, that’s where the good news ends.
– Germany (contraction):
– France (contraction, but strong domestic demand):
Source: Pantheon Macroeconomics
– Italy (flat again):
– The Eurozone (flat):
Source: Reuters Read full article
• Here are the GDP trajectories for Germany and Spain.
Source: @DanielKral1
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Japan
1. The Tokyo CPI topped expectations in January.
• Food inflation has been accelerating.
Source: @economics Read full article
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2. Retail sales were stronger than expected in December.
3. Industrial production inched higher.
4. The unemployment rate declined.
5. JGB yields keep climbing.
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Emerging Markets
1. Mexico’s GDP contracted more than expected in Q4.
Source: Reuters Read full article
• Bond yields are moving lower.
• The budget deficit has blown out.
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2. Brazil’s broad inflation index points to faster price increases.
• Formal job creation was very low in December.
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3. Argentina’s central bank reduced rates again as inflation slows.
Source: Reuters Read full article
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4. South Africa’s central bank cut rates this week.
Here is a look at historical projections for rate trajectories in South Africa.
Source: Codera Analytics
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5. Philippine stocks are nearing bear market territory.
Source: @DavidInglesTV, @BloombergTV
6. Funds focused on EM debt registered strong inflows.
Source: BofA Global Research
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Cryptocurrency
1. Some altcoins, such as XRP and Solana, had a strong January, although prices have pulled back over the past week.
Source: @TheTerminal, Bloomberg Finance L.P.
2. Roughly 24% of the top 50 altcoins have outperformed BTC over the past month.
Source: Blockchain Center
3. The SOL/BTC and SOL/ETH price ratios have risen.
Source: @KaikoData
4. Here is a look at Bitcoin price performance from prior cycle lows.
Source: @glassnode
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Commodities
1. Gold prices hit a record high amid trade uncertainty.
This chart shows COMEX gold inventories.
Source: @financialtimes Read full article
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2. Iron ore futures continue to rebound.
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Energy
1. US oil and gas producers have lowered output growth and employee hours.
Source: The Crude Chronicle
2. Here is a look at the LNG market.
Source: The Economist Read full article
• Goldman anticipates strong natural gas demand growth, driven by increasing power needs from data centers.
Source: Goldman Sachs; @MikeZaccardi
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Equities
1. Futures are up this morning as the market reacted positively to Apple’s earnings.
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2. Welcome to the “retail put.” According to JP Morgan, retail traders poured over $8 billion into equities last week—the largest weekly inflow in two years.
Source: JP Morgan Research; @WallStJesus
3. Financials are seeing strong inflows.
Source: BofA Global Research
4. Companies have expressed optimism in this earnings season.
Source: BofA Global Research; @SamRo
5. Macro hedge funds have sharply reduced their exposure to equities.
Source: Nomura Securities; @WallStJesus
6. US nominal earnings growth has outperformed nominal GDP growth since the 1990s.
Source: Deutsche Bank Research
7. Individual stocks significantly underperformed the S&P 500 last year (again).
Source: @markets Read full article
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Credit
1. Leveraged loan repricing activity remains elevated, …
Source: @business Read full article
… amid robust demand.
Source: BofA Global Research
• Leveraged loan spreads continue to tighten.
Source: Deutsche Bank Research
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2. High-yield bond funds are seeing inflows.
Source: BofA Global Research
3. JP Morgan’s positioning indicator suggests that credit is nearing overbought territory.
Source: @markets Read full article
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Rates
1. On average, the US issues more debt in a week than the entire outstanding debt of some advanced economies.
Source: BlackRock Investment Institute
• Treasury issuance is expected to remain elevated in 2025, with net coupon issuance driving the bulk of new debt supply. Wells Fargo forecasts $1.9 trillion in coupon issuance, reflecting sustained federal borrowing needs.
Source: Wells Fargo Securities
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2. MRB Partners estimates a neutral rate of 4.5%, which is well above the Fed’s latest estimate of 3%.
Source: MRB Partners
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Global Developments
1. Central banks’ rate-cutting frenzy has peaked.
Source: BofA Global Research
2. This chart highlights the cyclical nature of the semiconductor industry. The Philadelphia Semiconductor Index (SOX) rolling returns tend to lead world semiconductor sales.
Source: @JeffreyKleintop
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Food for Thought
1. Global jet retirements and average retirement age trends:
Source: The Economist Read full article
2. Housing concerns and rent distress in OECD countries:
Source: IMF Read full article
3. Homeowners without insurance by state:
Source: Semafor
4. Projected impact of immigration on the US budget deficit:
Source: @economics Read full article
5. EU countries’ defense spending and Ukraine aid by proximity to Moscow:
Source: The Economist Read full article
6. Decade of the most recent skyscraper completed:
Source: r/mapmixed
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Have a great weekend!
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