- The UK stock market is very cheap relative to the world no matter how you cut it.
Macroeconomics
Snippets on the big picture.
Central Banks and Bond Markets
- Chart depicting how much of the outstanding domestic bond market of major economies is currently owned by the central bank itself.
- Japan is a clear stand out, while others are catching up.
US Leveraged Loans Market
- Fascinating to see the change in market participants away from banks.
Zombie companies
- Low rates have spawned a growing army of zombie companies.
- This chart from DB shows companies where debt service payments exceed profits. These now make up nearly 20% of firms.
Foursquare Recovery Index
- Forsquare (covered here before) continues to be a great source of data to track the recovery.
- Recently this has been put together into a handy Recovery Index.
- The methodology and premise are described here.
EU Recovery Fund by Country
- Allocation of the EU €750bn recovery fund by country as a % of GDP.
- Source.
Sewage Covid Concentrations
Gundlach Latest Slides
- Always worth a flick through the latest presentation – titled Superman – from Jeffery Gundlach.
- This is an interesting slide showing that twin deficits (current account and budget) lead the US Dollar exchange rate by 2 years – suggesting downward pressure on the latter.
Predicting Interest Rates
- The solid line depicts the actual path of 10-year rates.
- Dotted lines are predictions by market participants in a Fed survey.
- For 20 years there has been a consistent forecast of higher rates that has not materialised.
- Source.
Assets and Inflation
- Interesting chart showing the percent of time (y-axis) various asset classes outperform inflation over a given time horizon (x-axis).
- Equities come out on top.
- Gold and Commodities, the usual hedges, actually don’t perform that well.
Debt and Crises
- This chart shows government debt to GDP of the G7 countries.
- It has been rising steadily and could close in on a record.
- Charted against this is the percentage of countries that have seen a financial shock over any 12 month period.
- Interesting to see that financial crises are more frequent in the post-Bretton Woods era, which coincided with rising debt.
Fiscal and Monetary Stimulus
UK Housing Market
- April Zoopla report is worth a read.
- This chart shows the bounce back in demand, with sales agreed likely to follow given pent up demand.
- Interestingly two coastal cities saw the biggest increase, while London is still down as demand shifts elsewhere.
It is always V-shaped?
- Interesting chart from MS that suggests that in the post-war period recoveries have tended to be V-shaped.
- The latest fund manager survey from Bank of America shows just 10% of respondents expect this.
Stimulus vs. Covid
- Interesting chart from Jefferies on the US Economy.
- They crunched the numbers and found that, because of various bits of stimulus more than offsetting falls in compensation, personal income has actually surged in April.
- Stimulus is of course front-end loaded and, unless extended, this picture likely fades with time.
- Nevertheless, it is very interesting to see how strong its impact has been.
China Recovery
- China’s recovery, across a set of metrics, is well under way.
Rail Car Traffic US
- A staggering decline in rail traffic. April saw -25%, a record.
- “Any industry that’s been around for 190 years has experienced a lot, but railroads have never faced something quite like what they’re facing now“.
Paul Tudor Jones on Gold and Bitcoin
- An interesting piece from Paul Tudor Jones on inflation, gold and bitcoin (explaining his latest investment in the latter).
- This is an interesting chart from the piece showing Gold above ground against M1 money supply.
Mastercard Spend Data
- Mastercard have updated spending data for the week ending May 7th.
- Pictured are cross-border volumes.
- Card not-present (i.e. physically) non-travel continues to grow strongly.
- Card present growth has bottomed and seeing a bit of improvement due to intra-Europe travel.
- Looking within borders. US Switched volumes are now -6% YoY from mid -20%s in April.
- Rest of world also seeing a bit of improvement from -33% at worst point to -19% now.
Employment in Recessions
- This is a great chart from Calculated Risk blog.
- It shows job losses as a percent from the start of an employment recession.
- Goes without saying what we are seeing now stands out.
