Deflation in China, US stock market performance and falling energy prices in the Middle East – Macrobond Financial

This chart analyzes the performance of the US stock market (S&P 500) during the month of June. It uses data from 1928 to 2023 to represent the average performance of the index up to a given date in the month. For example, the values ​​on July 4 represent the average performance of the S&P 500 index to that date for each July 4 from 1928 to 2023.

The graph consists of two parts. The first part is a simple line chart that illustrates the typical pattern of the US stock market. It shows that the market tends to have a strong start at the beginning of the month, stabilize and drop slightly about two-thirds of the way in, then recover towards the end. On average, by the end of July, the market’s month-to-date performance is 1.4%.

The second part is a unique bubble chart in which the size of each bubble corresponds to the strength of the month-to-date performance figure. For example, the bubble representing July 2 has a month-to-date figure of 0.3% and is the smallest bubble. Conversely, the bubble representing July 28 has a month-to-date performance of 2.1% and is the largest bubble.

Recovery trends and implications for real estate : use of the London Underground and the New York Underground

This chart looks at London Tube and New York Subway usage from 1^st March 2020 through 2023. It uses daily data to track passenger levels for each day of the week and expresses these levels as a percentage of pre-pandemic levels.

We can see that, on average, both London and New York are seeing a gradual return to what was considered normal. Subway use in London is about 80% of its pre-pandemic level, while subway use in New York City is around 70%. Could the rising trends in these charts bode well for a recovery over time in offices, retail and commercial real estate more broadly? Or will the new normal of reluctance to travel on Mondays and Fridays continue to weigh on these sectors?

Comparative analysis of government bond yields: Spain, France, Germany and the EU

This chart uses Macrobonds Yield Curve analysis to illustrate the full term structure of a selection of European country government bonds. We chose Spain, France and Germany and compared them with the EU.

The EU pays more to borrow with its joint bonds than the leading members of the bloc, eroding the appeal of joint issuance for those countries and encouraging opponents of new debt sales. During last year’s global bond sell-off, the EU’s borrowing costs rose faster than those of many Member States.

Today, they have risen above France’s borrowing costs, even though the EU’s credit rating surpasses France’s AA rating. At shorter maturities, Brussels yields are even higher than those paid by Spain and Portugal – long considered one of the bloc’s riskier debt markets.

Deflation concerns in China: unraveling the rapid decline in the CPI

As the world looks on with gratitude at the apparent cooling of US inflation, the latest CPI data out of China may be falling too fast, raising concerns about deflation in the world’s second-largest economy.

In the heatmap above, we’ve parsed China’s CPI data, highlighting a rising trend in red and a decelerating trend in blue. The most recent CPI figure fell to 0% in June, but we are still seeing significant increases in Apparel and Tourism, possibly boosted by the reopening in China. Worryingly, there are large areas of blue in Food and Energy, which make up 45% of the weight of the total CPI. Pork and beef prices in particular are cooling significantly, as are fuel and transport.

Trends in budget balances in emerging markets: impact of falling energy prices in the Middle East and Africa

This chart looks at budget balances in an emerging market universe and expresses them as a percentage of their respective GDP. Bars represent 2023 value, while markers represent 2022 values. Countries are color-coded based on the region they belong to, as shown by the legend.

This color coding helps shed light on some interesting broad trends in emerging markets. First, we can see that the budget balances of almost all Middle Eastern countries have deteriorated, perhaps due to falling energy prices. African countries seem to have improved their situation over the past year, possibly for the same reason?

Unveiling immigration trends in the UK: shifts in EU and non-EU migration and labor shortages

This chart examines immigration levels in the UK from 2010 to the end of 2022 using data on long-term migration. The figures are based on rolling estimates over 12 months and are broken down into EU immigrants, non-EU immigrants and British. Over time, EU migration has gradually declined, while non-EU immigration has increased, with a significant post-Brexit shift. Interestingly, given that overall immigration has actually increased, the UK is suffering from an acute labor shortage and the jury is split on whether the pandemic or Brexit is to blame.

Exploring UK real income trends: assessing the impact of parliamentary terms on income growth from Blair to Sunak

This chart looks at real income growth across percentile bands over the course of the last 6 UK parliaments. From Blair’s landslide victory in 1997, through his second term (the kaleidoscope has been shaken), all the way to Sunak today, we look at how real incomes have changed over parliamentary terms. We highlight the 10th and 90th percentiles in midnight blue and crimson, respectively, to represent the divergence in real income growth. All other gray lines in between represent the other income percentile bands (20th, 30th, 40th, 60th, 80th). It is clear that income growth in the UK has been declining for some time, but what could be the culprits? The GFC? Rigidity? Brexit? The pandemic? Or maybe it’s the combination of all…

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