The Daily Shot® Brief

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The United States: US consumer credit rose sharply in November, exceeding $5 trillion for the first time.

The Eurozone: Germany industrial production continues to tumble (six consecutive declines in a row).

Equities: The scale of downward earnings revisions for 2024 has been notably less severe compared to the usual trend.

Credit: Banks can borrow from the Fed’s term funding program (BTFP) for less than what the Fed pays on their reserves.

Emerging Markets: Here is a look at this year’s elections across EM economies.

Commodities: Gold and silver have diverged sharply in recent weeks.

Energy: Crude oil futures softened on Monday, influenced by Saudi Arabia’s decision to reduce prices for their Asian customers.

Food for Thought: Theft rates:

Edited by William Villacis

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The United States: Last month’s job growth surprised to the upside. This report deviated from the Fed’s anticipated trend of a loosening labor market.

Market expectations for the 2024 rate cuts eased further but remain much deeper than the FOMC’s forecast.

The Eurozone: The market has been scaling back its ECB rate-cut expectations.

Equities: S&P 500 breadth has significantly improved, which typically signals lasting internal momentum during bull markets.

However, there are signs of short-term breadth deterioration.

China: Despite Beijing’s efforts, stocks remain under pressure, with the CSI 300 Index at its lowest since 2019.

Emerging Markets: Brazil’s trade surplus climbed in December, topping expectations.

Food for Thought: Buy Now Pay Later online spending:

Edited by William Villacis

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Greetings,

 

The United States: Morgan Stanley sees the unemployment rate edging higher (1st panel) as more Americans enter the labor force (2nd panel).

The United Kingdom: Inflation expectations have been trending lower.

Cryptocurrency: Retail investors have been buying crypto-focused stocks.

Energy: Hedge funds remain very cautious on energy shares.

Equities: Equity fund flows have been robust.

Rates: The Fed typically cuts rates within eight months after its first pause.

Food for Thought: Average weekly cybersecurity attacks per industry:

Edited by Josh Oldmixon

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Greetings,

 

The United States:  The ISM manufacturing index has been in contraction territory for 14 months in a row, while new orders have declined for 16 consecutive months.

Job openings continue to fall, supporting the Fed’s goal of slower demand.

Cryptocurrency: Bitcoin declined sharply as volatility surged ahead of the ETF decision.

Equities: Here is Goldman’s positioning indicator.

Credit: US multi-family debt delinquencies continue to rise.

Energy: Crude oil is firmer amid tensions in the Middle East and the Libya oilfield shutdown.

Europe: The EU is a key market for China’s EV exports.

Food for Thought: Coffee bean trade flows:

Edited by William Villacis

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Greetings,

 

The United States:  Manufacturing construction spending continues to climb, driven by semiconductor facility investment.

The United Kingdom: When will the ECB begin cutting rates?

China: Properties are taking longer to sell.

Cryptocurrency: Ether continues to lag.

Equities: Analysts are upbeat about this year’s tech mega-cap performance.

Rates: Repo rates are elevated, pointing to tight liquidity.

Food for Thought: GRE scores across college majors:

Edited by Josh Oldmixon

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Greetings,

 

The United States:  The core PCE inflation (the Fed’s preferred measure) slowed more than expected.

The Eurozone: When will the ECB begin cutting rates?

China: Consumer sentiment has been awful.

Equities: Here is the relative performance of the S&P 500 equal-weight index.

Here is S&P 500 sector performance for 2023.

Global Developments: Global investment-grade bonds just had their best two months on record

Commodities: Rice prices continue to climb.

Food for Thought: Weekly working hours and wages:

Edited by William Villacis

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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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