The Daily Shot® Brief

Greetings,

 

The United States: The Conference Board’s index of leading indicators has declined for 20 months in a row.

The United Kingdom: Retail sales have been weak this month.

Japan: The CPI eased in November, in line with forecasts. Core inflation remains sticky.

Emerging Markets: Turkey’s central bank hiked rates again, this time by 250 bps.

Equities: Fund managers are less sure about large caps outperforming small caps.

Food for Thought: Office space per worker:

Edited by Josh Oldmixon

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Greetings,

 

The United States: Consumer confidence jumped this month, boosted by the stock market rally and cheaper gasoline.

The Eurozone: The 10-year Bund yield dipped below 2% for the first time this year.

Equities: FedEx sold off sharply on revenue outlook. Could this be indicative of a broader economic slowdown?

Share buybacks have been strong in recent weeks, helping to fuel the rally.

Credit: European CCC spreads have diverged from those of US counterparts amid concerns about a recession in the Eurozone.

Emerging Markets: There is room for EM valuations to improve.

Food for Thought: Annual wages of US physicians and surgeons:

Edited by William Villacis

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Greetings,

 

The United States: Last month’s residential construction data exceeded expectations, boosted by single-family housing.

The United Kingdom: Who is concerned about immigration?

Japan: The trade gap was narrower than expected in November.

Commodities: Fund managers are underweight commodities.

Equities: The Nasdaq 100 is up almost 54% this year.

Rates: The fed funds rate is expected to decline at a slower pace than core CPI next year.

Food for Thought: Landmine casualties:

Edited by Josh Oldmixon

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Greetings,

 

The United States: The NAHB homebuilder sentiment index showed a modest improvement this month, driven by a pullback in mortgage rates.

Equities: The SPDR S&P 500 ETF (SPY) saw a record spike in inflows last Friday (SPY is the largest ETF).

Demand for small-cap options created a sharp divergence between VIX and RVX (Russell 2000 VIX equivalent).

Japan: Despite all the rumors of policy tightening, the BoJ did not signal a rate hike ahead. The yen dropped in response.

Energy: The Houthi threat is disrupting shipping markets, boosting natural gas prices in Europe.

Rates: There is little agreement on the direction of Treasury yields next year.

Emerging Markets: Argentina cut rates after the massive currency devaluation.

Food for Thought: Listening to festive music:

Edited by William Villacis

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Greetings,

 

Equities:  Roughly 48% of Russell 2000 stocks made a 63-day high, reaching the fifth-highest level in history.

Commodities: The copper market is expected to be in surplus next year.

Credit: Downgrades continue to outnumber upgrades at lower rating levels.

Rates: US real rates have only recently turned positive and are not yet at restrictive levels by historical standards.

The United Kingdom: Capital Economics sees the BoE on hold longer than the Fed or the ECB due to elevated inflation. But once the BoE begins cutting rates, it will do so faster than the market expects.

The Eurozone: The euro-area composite PMI index is firmly in contraction territory signaling a recession.

Emerging Markets: BofA’s private clients have been dumping EM debt.

Food for Thought: Homelessness in the US:

Edited by William Villacis

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Greetings,

 

The United States: Adjusted for inflation, retail sales have been accelerating.

The United Kingdom: The pound jumped.

China: The PBoC accelerated liquidity injections to boost economic growth.

Energy: Crude oil bounced from the recent lows.

Equities: Market breadth has improved dramatically. Here is the percentage of S&P 500 stocks trading above their 200-day moving average.

Food for Thought: Number of curse words on streaming services:

Edited by Josh Oldmixon

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Greetings,

 

The United States: After the Fed’s “pivot” signal, markets have the first rate cut slated for March.

The yield curve steepened (bull steepening).

The Eurozone: Bond yields and swap rates declined sharply after the Fed’s pivot. The euro jumped.

Asia-Pacific: Asian currencies surged as the dollar weakened.

Equities: 90% of S&P 500 members are above their 50-day moving average.

Retail investors haven’t been this bullish since early 2021.

Credit: Credit spreads tightened sharply in response to the Fed’s pivot.

Food for Thought: Views on canine vaccines:

Edited by William Villacis

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Greetings,

 

The United States: On the other hand, smaller cities have been pushing up rent inflation.

The United Kingdom: Net unemployment claims:

Japan: Small non-manufacturing firms:

Energy: US natural gas futures are getting obliterated.

Equities: The S&P 500 has diverged from its earnings revision breadth.

Credit: Interest coverage ratios are trending lower.

Food for Thought: US population growth:

Edited by Josh Oldmixon

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Greetings,

 

Equities: The Dow rally looks stretched.

Credit: Weekly bankruptcy filings rose as the Fed hiked rates, although still below prior cycle highs.

The United States: This chart shows the year-to-date employment gains by industry.

The Eurozone: This table shows some scenarios for the ECB’s policy stance this week (from ING).

Japan: The markets now see almost zero chance of a rate hike this month.

China: Economic activity is starting to improve.

Cryptocurrency: Bitcoin saw a sharp pullback on Monday, with leveraged players forced to exit.

Food for Thought: High demand for pilots:

Edited by William Villacis

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Greetings,

 

The United States: Last month’s job gains topped expectations. However, excluding government jobs, the figure was roughly in line with economists’ estimates.

The United Kingdom: Construction activity continues to shrink.

Commodities: Gold is testing support near $2000/oz.

Equities: Broader US market performance would require strength in cyclical stocks relative to tech.

Energy: Crude oil has declined for seven consecutive weeks.

Food for Thought: NYC subway ridership:

Edited by Josh Oldmixon

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