Harvard tracks the short-term outlook for home improvement spend.
“The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry.“
Right now a bottom is seen in Q3 2024. The trajectory is a big upgrade on their previous outlook.
“Annuity sales are almost double their pre-pandemic levels because of higher interest rates. And strong annuity sales create strong demand for credit, see chart below.“
Nice page from IFS on how income inequality, living standards and poverty are evolving.
This one, in particular, is interesting – “Another way to see how income inequality has changed over time is the following chart – known as a ‘growth incidence curve’. This shows the average annual percentage growth in incomes at each percentile of the income distribution, for selected time periods.“
Tolerability looks to be important long-term followed closely by supply, the key constraint currently as GLP-1 molecules are peptides, which could be solved instantly if a non-peptide white pill is developed.
“The S&P 500’s total concentration, which we can measure using a Herfindahl-Hirschman Index (or HHI), is equivalent today to that of an equal-weighted, 59-stock portfolio. Ten years ago, the index was more than twice as diversified. We have never seen – over any 10-year period – a decline (or increase) in diversification of the magnitude we have just witnessed.“
Latest BIS quarterly thinks it is not because of the rise of 0DTE options (those that expire the same day). This week these hit a new record volume share at 57%.
Rather the rise of yield-enhancing ETFs that sell options (in various forms) is the real culprit – see lhs of chart. JPM has some further analysis via FT.
While on the topic of 0DTE the rhs chart shows their truly lottery-like payoff structure.
“Investing in 0DTE options loses money on average, with annualised returns of -32,000%, but on rare occasions generates extremely high returns of up to 79,000%. These returns are much more volatile than the returns on one-month options, which have an average return of -550% annualised and a maximum of 2,500%.”
“Boston Consulting Group believes that AI and regular data center demand will grow to 7% of total electricity demand by 2030. To put this in context, this is the equivalent of the electricity used for lighting in every home business and factory across the United States. It’s a huge amount of energy. Most traditional data centers that were built 10 years ago were 10 megawatts or less. Today, it’s not uncommon to see 100-megawatt data centers. And with our clients, we’re talking about data centers that approach 1,000 megawatts. And they require 24/7 power. This is something that doesn’t get talked about enough in my opinion.”
That is from Constellation Energy’s CEO Joseph Dominguez (Source: The Transcript) – who of course is talking his own book but still.
Others confirm this, like the IEA – which thinks AI energy demand will double by 2026 – “that’s equivalent to adding a new heavily industrialized country like Germany to the planet”.
There are other huge environmental impacts – e.g. water.
