Administrative Update

The October edition of The Daily Shot Pulse, our brief monthly survey of economic and market outlooks, is now open. We look forward to your participation.

United States

Our daily underlying growth estimate has been stable at around 2.9%, well above potential growth.

United Kingdom

The tax code and the number of regulatory bodies have swollen over the past four decades.

Europe

The Norwegian krone is on track for its ninth straight day of gains against the US dollar.

Asia-Pacific

The semiconductor sector is trading at record-low forward P/E levels.

Equities

Global earnings breadth continues to strengthen, with the share of companies posting accelerating earnings near record highs.

Credit

US office delinquency rates are near record highs.

Commodities

US primary production of aluminum continues to decline, while recycled metal now makes up most of US output.

Food for Thought

Netflix’s share of the most popular streaming shows has declined significantly as competing platforms have expanded their content offerings, eroding its early dominance.

United States

New-home inventory stands at 8.5 months of supply, but completed new homes represent just two months of supply, compared with 5.8 months in early 2009.

United Kingdom

The UK tax burden is on course for its highest share of GDP since the Second World War.

Euro Area

This scatterplot compares euro area sovereign credit ratings from S&P with yield spreads over Germany.

China

China’s nominal GDP relative to the US has consistently undershot earlier forecasts.

Equities

J.P. Morgan estimates that only 20% of AI capital expenditures will be funded by free cash flow in 2027, with the remaining 80% requiring external financing.

Energy

Near-term natural gas demand is forecast to remain well below historical norms.

Cryptocurrency

Tokenized real-world assets have reached $39 billion, led by US Treasuries.

Food for Thought

AI adoption appears to be in its early stages.

United States

After decades of increasing in size, newly built homes are shrinking.

United Kingdom

Corporate insolvencies fell year over year in September, bringing monthly failures in line with their pre-pandemic trend.

Japan

Inflation accelerated, topping the BoJ’s 2% target. Roughly two-thirds of the core acceleration reflected one-off factors such as the cessation of municipal water fee waivers, though underlying price pressures broadened.

Asia-Pacific

Smoke haze from regional fires has repeatedly pushed Singapore’s air quality into the unhealthy range this year.

Emerging Markets

Oxford Economics expects most emerging-market central banks to be less hawkish than markets anticipate in 2027.

Equities

The profit margin expansion in the US has been broad-based.

Food for Thought

Amazon plans to hire more than 300,000 workers across seasonal, part-time, and full-time positions for the holiday season, a 20% increase from last year.

United States

J.P. Morgan’s consumer card spending growth has moderated on a three-month-over-three-month basis, although recent readings have rebounded.

Euro Area

France has the OECD’s second-highest ratio of public pension spending to GDP, behind only Italy.

China

According to Professor Takatoshi Ito’s Japanization indices, China has been more “Japanized” than Japan over the past few years.

Emerging Markets

Indonesian equities trade at a substantial valuation discount to broader emerging markets, …

… while their weight in emerging market benchmarks has continued to dwindle.

Equities

Anthropic now generates more quarterly revenue than established corporate giants including Intel, Uber, Coca-Cola, and Netflix.

Rates

Here’s a look at Treasury ownership trends.

Global Developments

US government interest expenses are among the highest in the developed world relative to GDP.

Food for Thought

Friday night has become just another weeknight in terms of socialization.

United States

Pending home sales tumbled to a record low amid elevated mortgage rates and persistent affordability pressures.

Euro Area

Following an initial broad sell-off, euro area sovereign bond markets have begun differentiating among countries. Yield spreads widened further in France and Belgium amid fiscal and political concerns but narrowed in southern Europe.

Europe

Citigroup’s earnings revisions index for European equities has been positive for 25 consecutive weeks.

Japan

Japan’s holdings of foreign assets amount to approximately 147% of GDP.

China

Applications to China’s National Natural Science Foundation have surged, far outpacing funding growth and pushing grant approval rates from 22% in 2013 to just 12% in 2025.

Equities

Historically, the S&P 500 has delivered a median quarterly return of 3% when economic growth remained positive but decelerated, compared with 5% during accelerating growth.

Here’s a look at returns by sector and by growth environment.

Rates

Call option activity on long-term Treasury bonds has surged to record levels, suggesting increased positioning for a potential rally in long-duration Treasuries.

Food for Thought

At age 41, LeBron James begins his record 24th NBA season with the Philadelphia 76ers, highlighting his extraordinary longevity in an increasingly young league.

United States

A substantially larger share of outstanding mortgages now carries interest rates below prevailing market rates than in 2022.

Euro Area

Italy’s high concentration of employment in small firms may contribute to its weak productivity growth relative to the G7 and OECD averages.

Europe

Demand for data center workers is accelerating across Europe, even as hiring for other technology roles remains subdued.

Japan

Households’ government bond holdings as a share of cash savings have risen recently from a low base.

Emerging Markets

Surging AI-driven earnings forecasts for Asian chip and hardware suppliers …

… have pushed emerging-market stocks to a record valuation discount to US peers.

Equities

Only 3.2% of the utilities sector’s constituents yield more than the 10-year Treasury, challenging the sector’s traditional income appeal.

Rates

Bridgewater’s analysis shows that global term premiums have historically been correlated with the share of outstanding bonds held by price-sensitive investors.

Food for Thought

Americans are increasingly choosing solitude over socializing, even as participation in some out-of-home activities rises.

United States

Manufacturing growth remains concentrated in advanced industries, particularly computers, electronics, and aerospace.

h/t @samueltombs, Pantheon Macroeconomics

Euro Area

France has the highest risk of civil unrest among G7 countries, per Bloomberg Economics.

China

Q3 GDP growth picked up to 4.5% year over year from 4.3%, slightly better than expected. Export resilience and policy-supported manufacturing continued to offset weak domestic consumption.

Equities

Declining average pairwise correlations across equity sectors suggest greater opportunities for active sector selection.

Rates

Gold has topped Treasuries in global central bank reserves.

Energy

Despite retreating from their peaks, supertanker freight rates remain historically elevated as Middle Eastern shipping disruptions and sanctions uncertainty persist.

Global Developments

The US dollar rally appears increasingly exhausted as breadth deteriorates, according to Variant Perception.

Food for Thought

The men’s marathon world record from 2000 would rank only 52nd today.

United States

This chart shows the September core PCE forecasts from various sources, after incorporating the PPI report.

United Kingdom

Britain’s growth is proving resilient to the oil shock because falling energy intensity is limiting second-round inflation effects.

Euro Area

Oxford Economics estimates that a severe French sovereign debt shock, with the French–German yield spread widening to 400 basis points, could push France and Italy into recession in 2027, while Spain, Portugal, and Greece would remain relatively resilient and the euro area as a whole would avoid a recession.

Emerging Markets

Latin American local-currency government bonds have outperformed emerging-market peers in Europe and Asia as domestic political developments bolster expectations for fiscal discipline and economic reform.

Equities

Unlike the dot-com bubble, when global technology stocks surged far ahead of earnings, the current rally has been supported by stronger earnings growth.

Credit

Credit stress is intensifying among highly leveraged AI companies.

Alternatives

University endowments are posting their strongest returns in five years, driven by windfalls from SpaceX and other AI bets.

Food for Thought

These are the most popular ice cream flavors by state.

United States

The share of the CPI basket running above a 3% annualized rate rose further, casting doubt on the disinflationary trend.

Japan

Japanese banks and insurers have been net sellers of foreign long-term bonds this year, …

… but have stepped up purchases of domestic bonds as JGB yields hit multi-decade highs.

Asia-Pacific

A global semiconductor selloff has pushed SK Hynix more than 50% below its peak, while the Kospi suffered a 7.6% single-day decline.

Equities

This chart shows the federal government’s equity stakes in private companies.

Rates

Retail investors have purchased nearly $3 billion in fixed-income ETFs on Citadel Securities’ platform in October, putting the month on pace for record net buying in data going back to 2017. Demand has favored T-bills, ultra-short-duration bonds, municipal bonds, and Treasuries over credit.

Global Developments

Bilateral exports between China and the US have fallen below their pre-tariff trends, while both countries’ exports to other markets have increased.

Food for Thought

Rather than becoming obsolete, some older GPUs are appreciating in value amid sustained demand for computing capacity.

United States

Homebuyers canceled 14.5% of purchase contracts in September, the highest share on record outside the pandemic.

Europe

China’s business R&D spending as a share of GDP is now far above the EU’s and level with Germany’s.

China

China’s year-to-date trade surplus expanded to a record high.

Equities

AI beneficiaries have weakened since late June, while companies exposed to AI disruption have rebounded.

Alternatives

Private equity buyers’ valuation premium over strategic acquirers has narrowed to its lowest level since 2023, with sponsors paying a median 10.9 times EBITDA versus 8.9 times for strategic buyers.

Global Developments

Here’s a look at the latest IMF global growth forecast for 2026 …

… and 2027.

Food for Thought

Magazine covers can serve as contrarian sentiment indicators, with bearish covers often appearing near market bottoms and bullish covers near peaks.

United States

PPI trade services, a leading indicator of underlying retail sales growth, has slowed sharply, signaling further weakness in consumer spending, according to Pantheon Macroeconomics.

Euro Area

French business uncertainty jumped in September.

Asia-Pacific

Australia’s rare-earth stocks have fallen back to earth.

China

Total nonfinancial credit topped 300% of GDP last year, well above the US level.

Equities

Since 1974, every S&P 500 bull market that reached its fourth anniversary has gone on to complete a fifth year, with the four most recent cases delivering double-digit gains without a correction exceeding 10%.

Rates

As of September 30, $10.7 trillion, or 33% of outstanding marketable Treasury debt, was set to mature within 12 months, exposing the federal government to refinancing costs above 4%.

Global Developments

Over the past 125 years, major fiat currencies have lost nearly all their value relative to gold.

Food for Thought

An optimized route connecting one landmark in each of the 48 contiguous states and Washington, DC, spans 13,949 miles and an estimated 224 driving hours, excluding traffic and time at stops.

United States

The average probability of a recession over the next 12 months dipped to 24%, according to The Wall Street Journal’s survey of economists.

Euro Area

German startup formation has surged.

Emerging Markets

Latin American equities are cheap based on the cyclically adjusted P/E ratio.

Equities

AI-related stocks make up 49% of the S&P 500’s market capitalization, …

… exceeding the concentration reached during every historical bubble except the railroad boom.

Rates

Market participants expect the federal funds rate to average 3.25% over the next decade, implying a hefty term premium priced into the rate curve.

Alternatives

Hedge funds’ market footprint has expanded substantially, particularly through rising gross notional exposures.

Food for Thought

Across wealthy countries, millennials have higher inflation-adjusted incomes than previous generations did at comparable ages.

United States

Only about 20% of US states are growing faster than the national average, among the lowest shares since 1979.

United Kingdom

Household credit demand fell sharply in the third quarter.

Euro Area

The median French pensioner has a higher income than the median working-age adult.

Asia-Pacific

Asian markets now account for six of the top 10 equity markets by market capitalization.

China

Daily transaction volumes on China’s Cross-Border Interbank Payment System (CIPS) reached a record high in August, suggesting a modest but sustained boost to Beijing’s efforts to develop parallel financial infrastructure.

Equities

Of the six previous bull markets that lasted at least four years, five gained further ground in their fifth year, with an average fifth-year return of 12%.

Rates

The five-year, five-year forward real Treasury yield is roughly 70 basis points above estimated US potential growth, suggesting that long-term real rates may have overshot equilibrium, according to Alpine Macro.

Food for Thought

These combinations of universities and majors can lead to salaries of $200,000 or more four years after graduation.

United States

Recent data show little evidence of a broad-based deterioration in labor-market conditions.

Euro Area

Euro area corporate credit spreads have jumped.

Japan

Foreign investors turned net buyers of Japanese equities.

Asia-Pacific

Australia’s decade of steep tobacco tax increases has fueled an organized-crime-run black market, now accounting for 55% of cigarette sales, while the price of legal cigarettes has surged to almost A$60 a pack.

China

China is bucking the global bond rout, with its 10-year yield falling as weak consumption, a property slump, and heavy bank and household buying hold rates down.

Our calculations show that the ex ante term premium for 10-year CGBs is slightly negative. In other words, taking on duration risk does not appear to be rewarded.

Emerging Markets

Chilean equities have underperformed copper lately.

Equities

Last quarter delivered the strongest S&P 500 earnings growth of this century outside postcrisis rebounds, although roughly 22 percentage points came from one-time gains, leaving underlying growth near 28%. Consensus estimates point to a moderation in Q3 earnings growth, with less assistance from unusual gains.

Equities

Here’s a look at EPS growth by sector or industry.

Food for Thought

France’s wine output is forecast to fall to its lowest level this century.

United States

Carlyle’s portfolio-company KPIs remain consistent with real GDP growth of 2.4% and corporate revenue growth of 6%.

Euro Area

French 10-year OATs have delivered the worst year-to-date returns among major developed-market government bonds.

China

China is stepping up enforcement of a 20% tax on income from offshore trusts, including interest and dividends, as authorities tighten scrutiny of overseas wealth. The chart below shows that Hong Kong dominates offshore allocations among affluent mainland Chinese.

India

The Reserve Bank of India delivered its first rate hike in nearly four years, lifting the repo rate by 25 bps to 5.5% and shifting to a “calibrated tightening” stance as oil-driven inflation builds.

Equities

Q3 margin estimates have been revised lower in every sector except tech.

Rates

Are Treasury yields just catching up to improving economic surprises?

Food for Thought

Registrations of Slovenia’s .si domains surged after President Trump directed federal agencies to use “super intelligence” (SI) in place of “artificial intelligence” (AI).

United States

Economic activity has remained resilient despite headwinds from the dollar, oil prices, and bond yields.

Euro Area

The FX-hedged 10-year French yield offers only about a 40 bp pickup over Japan’s domestic yield.

Emerging Markets

Lula’s share of the vote fell from 2022 levels in 25 of Brazil’s 27 states in the first round of the presidential election.

Equities

NVIDIA’s weighting in ACWI—the ETF that tracks the MSCI All Country World Index—has now surpassed that of Japan. In other words, if NVIDIA were considered a country, it would rank as the second-largest in ACWI, behind only the United States.

Rates

As yields and volatilities rise, the likelihood that the cheapest-to-delivers (CTDs) of Treasury futures switch into longer-maturity bonds increases, raising the value of the embedded delivery option.

While a conventional fixed-rate bond’s duration typically falls as yields rise, Treasury futures can behave differently: a switch in the CTD toward a longer-duration bond can increase the futures contract’s duration.

Credit

Here’s a look at redemption requests at major private credit BDCs.

Commodities

The valuation indicators from Topdown Charts suggest gold is expensive while Treasuries are cheap relative to history.

Food for Thought

Children’s career choices are influenced by the occupations of their neighbors.

United States

Cyclical payrolls—construction and manufacturing—have rebounded from their 2025 weakness to a new cycle high, signaling improving economic momentum despite weak headline payrolls.

Euro Area

Over 50% of young adults in Spain live with their parents.

Spain’s housing stock has barely grown since 2015, even as its population climbed and inflation-adjusted rents surged.

Emerging Markets

Flávio Bolsonaro led President Luiz Inácio Lula da Silva in Brazil’s first-round election (47% versus 45.1%), setting up an October 25 runoff.

Equities

The equal-weighted S&P 500 continues to lag the cap-weighted benchmark. The relative ratio’s deviation from trend is nearing levels last seen during the dot-com bubble.

Rates

Our Treasury Dislocation Index, which measures the deviations of individual Treasury notes and bonds from their theoretical fair values, has risen recently, though the level is by no means extreme.

Credit

Roughly 83% of the corporate bond market’s credit premium from 1997 to 2023 was earned during the first five trading days of each month.

Commodities

Discoveries of major gold mines have dwindled to almost none in recent years.

Food for Thought

The share of Americans hosting friends or family at home has plunged.

United States

Construction spending on data centers is going parabolic.

Euro Area

France unveiled a €54 billion fiscal consolidation plan—including €43 billion in new measures and €11 billion from previously enacted measures—to cut its deficit to 5% of GDP in 2027 from 5.4% this year.

The public debt burden is expected to surpass 120% of GDP next year.

Emerging Markets

Chile’s economic activity fell for a second month, pulled lower by a sharp decline in mining activity due to weather and maintenance disruptions even as non-mining sectors rebounded.

Equities

Since 1930, the S&P 500 has gained an average of 5.6% in the fourth quarter of midterm years, nearly double its 2.9% average across all years.

Rates

Retail investors made their largest-ever rotation into long-duration Treasury ETFs, led by record inflows into TLT.

Energy

Record diesel prices are squeezing farmers, truckers, and small businesses.

Global Developments

The US dollar remains the dominant reserve currency.

Food for Thought

This chart shows how $100 in AI capex flows through the supply chain.

United States

The shares of the PCE basket that showed price increases above 3%, measures that Chair Warsh used to gauge underlying inflation, fell on the month, though they remained higher than pre-pandemic averages.

Euro Area

The French dividend yield is well below the country’s nominal bond yield.

Asia-Pacific

South Korea’s exports expanded in September at their fastest annual pace since February 1974, beating consensus on surging semiconductor and automotive shipments to the United States.

Emerging Markets

Eurobond issuance by emerging markets is running at a record pace in 2026.

Equities

Cumulative US equity real returns have been remarkably stable over the long run, but a large equity-bond premium is mainly a 20th-century phenomenon.

The US has the lowest equity risk premium among major developed economies.

Energy

Middle East oil exports have recovered to 89% of prewar levels following the restoration of flows through Saudi Arabia’s East-West pipeline, with the 10-day average holding at 20.5 million barrels per day.

Global Developments

Inflation has flattered global debt-to-GDP ratios, …

… but structurally higher interest rates have pushed up mature-economy government interest costs.

Food for Thought

Property values in the board game Monopoly—originally based on 1930s Atlantic City real estate—have diverged significantly from present-day market values when adjusted for inflation.

United States

Long-term unemployment is rising in the current expansion, unlike in prior cycles.

The average length of joblessness is now more than six months, the longest since the mid-2010s outside the pandemic.

Euro Area

Here’s a look at major German economic indicators relative to their pre-pandemic trends.

China

China unveiled a mini-stimulus package, including a 25-basis-point cut in the pledged supplementary lending rate, a one-percentage-point interest subsidy for eligible first-home mortgages, and targeted lending support.

Equities

Here’s a look at the total cash yield by sector.

Rates

Hedge funds have been the dominant force behind the surge in US repo borrowing.

Energy

The energy sector has become very negatively correlated with the S&P 500.

Alternatives

A historic number of VC-backed companies are failing.

Food for Thought

Here is a sample of names that are predominantly female in one country but male in another.