Macroeconomics

Snippets on the big picture.

Macroeconomics

Global Consumer Pulse

  • Nice table from McKinsey on the global consumer.
  • It shows net intent to purchase a particular category by country.
  • Net intent = % who said they would increase purchases in the next two weeks compared to usual minus % who said they wouldn’t.
  • Interesting to see China/Korea recovering somewhat but not in all areas.

Macroeconomics

Chinese Economic Activity

  • Interestingly surveys suggest Chinese consumers are cautious despite lifting of the lockdown.
  • “A Morgan Stanley online survey of 2019 consumers in 19 provinces last week found that while most respondents—86%—were leaving the house for work, most were still reluctant to go out to shop, eat or socialize. And 69% said they would go out for essentials only, down from 75% in early March—still extremely high.” (Source: WSJ).
  • The chart below is also interesting showing how activity across a set of indicators has fared so far in China post the lunar new year as the country opens up.
  • In short – activity will take some time to recover.
  • Could the same be the case in other countries?
Macroeconomics

Dividend Futures

  • The dividend futures market has been crushed.
  • This chart (from ML) on the left shows the futures curve for S&P 500 dividends compared to 2019.
  • The blue line is how the market looked at the top (21st Jan 2020) and the orange how it looks today.
  • The market is pricing in -42% in dividends by 2021.
  • The right hand side shows the situation in 2008 – the actual reality (dark orange line) was far better.
Macroeconomics

Covid Impact 7 – Mobility

  • A cool dataset from Google on community mobility due to COVID-19.
  • Just type in your country.
  • Similar to Foursquare data.
  • The one for UK is interesting. Figure shows Greater London.
  • Probably the starting point for this.
  • In the end Covid could prove to be a huge boon for analysis. The level of data generated is unprecedented.
  • It is also arguably the closest we have come to macro-level natural experiment – an economists dream.
Macroeconomics

Covid Impacts

  • Interesting data from Foursquare regarding foot traffic (up to 27th March) in the US.
  • As expected Airports -66%, Hotels -61%, Bars -60%, Gyms -64%, Malls -61%, Clothing Stores -72%, Movie Theatres -75%, Restaurants -73%.
  • There are some interesting observations though.
  • Despite restaurant traffic being down 73%, fast food is only -17% – likely due to take away.
  • Interestingly after the initial stocking spike traffic to supply stores, grocery stores (pictured) and liquor stores is now well down from the peak (but still up overall).
  • Drug stores on the other hand are seeing a +28% and hardware stores continue to see strong traffic (+27%).
  • Gas station traffic initially ticked up but are now seeing -7-8% decline.
  • Outdoors is booming with visits to trails +34% and parks +10%.
Macroeconomics

Dealer Inventory (repost)

  • US Bonds outstanding continues to grow.
  • However, inventory of bonds at primary dealers has stayed low since the financial crisis.
  • This doesn’t however capture turnover of inventory – which has risen.
  • Overall this still creates a very risky situation in terms of liquidity.
  • Especially problematic now that Bond ETFs have hit $1 trillion.
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