The Daily Shot: 07-May-21
• The United States
• The United Kingdom
• The Eurozone
• Europe
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Equities
• Credit
• Global Developments
• Food for Thought
The United States
1. Let’s begin with the labor market.
• Initial jobless claims remain on a downward path.
Source: Oxford Economics
The total number of Americans receiving unemployment benefits is also declining.
Source: @GregDaco
• Here is a look at job openings on Indeed by sector.
Source: @WSJ Read full article
• Despite a relatively high unemployment rate, the number of applicants has been lagging openings.
Source: @WSJ Read full article
Is the extra $400/week in benefits keeping some from returning to work? Several state governments think so.
Source: @axios
• Labor productivity increased more than expected last quarter.
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2. Next, we have some updates on housing.
• Loan applications to purchase a home decreased again last week.
• The gap between new and existing home prices has narrowed over the past few years.
Source: III Capital Management
• Is the eviction moratorium about to end?
Source: @WSJ Read full article
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3. US household net worth has risen faster than consumption.
Source: Alpine Macro
4. Companies are onshoring to the US again.
Source: Cornerstone Macro
Most companies are onshoring to southeastern states.
Source: Cornerstone Macro
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5. Which imports drove the recent increase in trade deficit?
Source: @WSJ Read full article
6. Here is the impact of the American Families Plan and Build Back Better proposals on the federal deficit (according to Moody’s Analytics).
Source: Moody’s Analytics
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The United Kingdom
1. The BoE upgraded its economic forecasts.
Source: Reuters Read full article
Source: CNBC Read full article
Source: ING
The reduction in bond purchases is not considered “tapering” because the BoE doesn’t have an unlimited QE program like the Fed.
Source: MarketWatch Read full article
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2. Longer-term market-based inflation expectations have been rising.
3. The updated April Markit Services PMI figure was even stronger than the earlier report, as Britain reopens.
Hiring is accelerating.
We should see a sharp increase in economic growth.
Source: Pantheon Macroeconomics
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4. This chart shows the year-to-date stock and bond market performance.
Source: S&P Global Market Intelligence
5. Since the start of the pandemic, online retail sales have increased substantially (as a percentage of total sales).
Source: STUC Read full article
6. Who funds the UK’s venture capital investments?
Source: @amyrlewin, @collectivequity Read full article
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The Eurozone
1. Germany’s factory orders continue to climb.
But the recovery in industrial production has been lagging.
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German construction activity remains soft.
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2. Euro-area retail sales surged in March.
3. This chart breaks down the resource allocations of the national recovery plans.
Source: Bruegel Read full article
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Europe
1. Here are some updates on Sweden.
• Service industries expanded rapidly last month.
• Private sector output surged in March.
• Household consumption is recovering.
• Here is the historical seasonality in Swedish stocks.
Source: Nordea Markets
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2. EU asylum applications delined last year.
Source: Eurostat
3. What are the main destinations for the EU’s waste?
Source: Eurostat Read full article
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China
1. Markit’s service-sector PMI showed further improvement in growth last month (exceeding forecasts).
2. Exports are surging this year.
But as commodity prices soar, imports climb quickly as well ($ value).
Here is the trade balance.
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3. The renminbi continues to climb vs. USD.
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Emerging Markets
1. Let’s begin with India.
• COVID cases hit 400,000 per day.
And that’s causing havoc in the shipping industry (which is already strained).
Source: @adam_tooze, @financialtimes Read full article
• Bond yields declined further amid RBI’s support.
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2. Philippine exports hit a record high.
3. This chart illustrates the growth of the middle class in select economies.
Source: J.P. Morgan Asset Management
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Cryptocurrency
1. Crypto trading surged this year.
Source: @jessefelder, @financialtimes Read full article
2. Crypto-related Twitter activity has been soaring.
Source: Arbor Research & Trading
3. The media has jumped on the bandwagon with positive coverage (helps with the ratings).
Source: Arbor Research & Trading
4. The share price of Coinbase has given up much of the post-IPO gains.
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Commodities
1. Commodity markets are on fire.
• Bloomberg’s broad commodity index:
• The LME’s metals index:
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2. The CRB Core Commodity Index is at long-term resistance.
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital
3. COMEX copper cleared the 2011 peak.
4. China’s thermal coal futures hit a new high.
5. Gold is above $1,800/oz again.
Source: barchart.com
6. CBOT corn futures are the most overbought since January, which led to a period of sideways trading.
Source: Dantes Outlook
8. With soybean prices hitting multi-year highs, …
… soybean oil has been outperforming palm oil.
h/t James Poole
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7. Next, we have some updates on lumber.
• FTX created a futures contract on lumber, providing access to the Reddit crowd.
Source: Bloomberg Read full article
• The curve is in deep backwardation amid supply/demand imbalances.
Source: III Capital Management
The difference between May and November delivery is at an extreme.
Source: III Capital Management
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8. The CME Group will permanently end open-outcry trading for all products except Eurodollar options.
Source: Crain’s Chicago Business Read full article
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Equities
1. US stocks have been outperforming global peers since March.
The valuation gap has widened sharply.
Source: Gavekal Research
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2. US stocks perform well when the ISM Manufacturing PMI rises.
Source: Chen Zhao
3. Strong earnings growth is supporting dividend hikes.Â
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital
4. Corporate guidance is back.
Source: @ISABELNET_SA, @BofAML
5. Next, we have some sector updates.
• Dow transport stocks relative to utilities are testing resistance. Will we see a pause in the cyclical rally?
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital
• The weakness in tech stocks earlier this year coincided with lock-ups ending for IPO insiders.
Source: Nordea Markets
• Here is the relative performance for select sectors over the past five business days.
– Metals & Mining:
– Telecoms:
– Pharma and biotech (see story):
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6. Companies with weaker balance sheets continue to outperform.
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Credit
1. This chart shows investment-grade bond yields vs. duration by sector.
Source: Mizuho Securities USA
2. Next, we have corporate debt (long- and short-term) as a percentage of the GDP.
Source: Mizuho Securities USA
3. Which sectors are the most vulnerable over the next 12 months?
Source: S&P Global Market Intelligence
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Global Developments
1. Global food prices are up over 30% vs. a year ago.
2. Here is the private-sector credit impulse.
Source: @macro_daily
3. The bond market size surged last year.
Source: J.P. Morgan Asset Management
4. Morgan Stanley forecasts a wider US current account deficit which could weigh on the dollar.
Source: Morgan Stanley Research
However, relationships between currencies and the current account are mixed and mostly statistically insignificant, according to Morgan Stanley.
Source: Morgan Stanley Research
There is a much more consistent relationship between imports and currency movements.Â
Source: Morgan Stanley Research
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Food for Thought
1. Union membership globally …
Source: Statista
… and in the United States:
Source: Statista
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2. Revenue per employee:
Source: @WSJ Read full article
3. Patent applications:
Source: J.P. Morgan Asset Management
4. Violence and fetishization:
Source: polici Read full article
5. Race/ethnicity representation in financial services:
Source: @financialtimes Read full article
6. Religious service attendance in the US:
Source: Gallup Read full article
7. US households’ stock holdings as a share of total financial assets:
Source: @WSJ Read full article
8. The altitude of space junk from the disintegrating Chinese rocket:
Source: SciTechDaily Read full article
9. Literal names of places in the US and Canada:
Source: Mental Floss Read full article
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Have a great weekend!
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