The Daily Shot® Brief

Greetings,

The United States: This chart shows the probability of a recession as implied by various market indicators.

China: Bond yields jumped as Beijing cracks down on debt purchases by banks.

Emerging Markets: India’s industrial production growth slowed, surprising to the downside.

Energy: Brent crude jumped above $80/bbl due to geopolitical uncertainty but encountered resistance at the 200-day moving average.

Equities: The Fed is increasingly discussed on earnings calls.

Rates: Fund managers expect short-term rates and bond yields to decline in the months ahead.

Food for Thought: Delaware is the preferred domicile for S&P 500 companies.

Edited by William Villacis

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Greetings,

The United States: Dollar-denominated money market fund assets hit a record high last week.

Japan: Barclays says the BoJ is probably done for the year.

Commodities: The November soybean futures dipped below $10/bushel.

Equities: The GS positioning index eased further last week.

Credit: Last week’s stock market dive also rocked the US leveraged loan segment, marking one of the worst days since the onset of the pandemic.

Food for Thought: Companies relocating to Texas:

Edited by Josh Oldmixon

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Greetings,

The United States: Initial jobless claims eased last week, alleviating concerns about labor market weakness and recession risks.

Japan: Nonetheless, retail investors have been buying Japanese shares.

Energy: US market-based inflation expectations are highly correlated to crude oil prices.

Equities: Thursday was a good day for US stocks as initial jobless claims alleviated some concerns about labor market weakness and recession risks.

Global Developments: How did DM currencies perform on Thursday?

Food for Thought: Underwater mortgages:

Edited by Josh Oldmixon

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Greetings,

The United States: The increases have been particularly sharp among younger Americans.

The United Kingdom: Here is a look at prison population vs. capacity.

Energy: Crude oil failed to rebound with stocks despite geopolitical tensions.

Equities: Futures are higher this morning, but the rebound has been choppy.

Rates: Open interest in 10-year Treasury futures is near record highs.

Food for Thought: Solar share of global electricity generation:

Edited by Josh Oldmixon

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Greetings,

The United States: The ISM Services PMI returned to growth in July.

Japan: Japan’s real earnings growth was finally positive in June, topping expectations.

Commodities: The recent rally in copper prices has diverged from the ISM Manufacturing PMI.

China: China’s oil demand has been soft, pressuring global prices.

Equities: How does the S&P 500 perform after 5% pullbacks?

Credit: Spreads have widened sharply.

Food for Thought: Historical share of US tariff revenue in total federal receipts from 1798 to 2023:

Edited by William Villacis

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Greetings,

Equities: VIX futures surged above 30 as the VIX curve moved deep into backwardation.

The stock/bond correlation has weakened.

Commodities: Hedge funds have turned bearish on commodities.

Emerging Markets: Leading indicators point to an earnings rebound for EM companies.

The United States: Some of the weakness in the jobs report was due to seasonal adjustments. Here is a quote from Scotiabank Economics:

“If instead of using the BLS SA factor for July 2024 that generated this morning’s +114k print we were to apply the average SA factor for months of July up to and including 2019 before the pandemic struck the next year, then this July’s nonfarm payrolls would have been up by  about 200k instead of 114k.”

Global Developments: Markets are pricing in additional rate cuts across most advanced economies for this year.

Food for Thought: Global Big Mac prices compared to the US:

Edited by William Villacis

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Greetings,

The United States: Jobless claims have risen over the past few weeks, significantly exceeding the average of recent years (ex COVID shock).

The United Kingdom: The BoE cut rates for the first time since the COVID shock.

Japan: Japanese shares plummeted as the yen strengthened.

Emerging Markets: Turkey (intensifying contraction):

Equities: Implied volatility indicators are surging.

Food for Thought: US population growth by region:

Edited by Josh Oldmixon

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Greetings,

The United States: The rapidly falling quits rate points to further employment cost index (ECI) easing.

The Eurozone: Services inflation remains elevated, exacerbated by labor shortages.

China: The Manufacturing PMI from S&P Global dipped into contraction territory in July, confirming the official PMI data.

Emerging Markets: India’s key industries’ growth slowed in June.

Commodities: Funds have been trimming their bets on copper.

Equities: The S&P 500 index price has decoupled from market breadth.

Food for Thought: Number of data centers by country:

Edited by William Villacis

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Greetings,

The United States: Labor market imbalances eased further, with the number of job openings per unemployed person returning to pre-COVID levels.

Europe: The Czech Republic’s GDP growth was softer than expected last quarter.

China: The IMF sees China’s GDP growth slowing further.

Commodities: A small allocation to commodities can improve the risk-adjusted returns of a traditional 60% equity/40% bond portfolio.

Energy: Europe is on track to reach gas storage capacity in November, ahead of peak demand, which could constrain prices.

Equities: Is a softer US labor market signaling slower earnings growth ahead? (the Russell 3000 is a broad equity index that includes large and small caps)

Food for Thought: Voter preferences in swing states for the 2024 presidential election:

Edited by Josh Oldmixon

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Greetings,

The United States: Steady inflation expectations have been helpful in stabilizing core inflation.

The United Kingdom: Traders have never been this bullish on the British pound.

Japan: Hedge funds have sharply reduced their bets against the yen amid the unwinding of carry trades.

Emerging Markets: Brazil’s debt-to-GDP ratio keeps climbing, although the latest print was lower than expected.

Commodities: Bloomberg’s broad commodities index has been sinking.

Equities: Slower economic growth could weigh on equity valuations.

Food for Thought: US coal industry employment:

Edited by William Villacis

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