Daily BriefsMacro

Macro: TMI Snapshots: US Defense Equity Sentiment Bottoming; Hydrogen Economy Sentiment Surges Again and more

In today’s briefing:

  • TMI Snapshots: US Defense Equity Sentiment Bottoming; Hydrogen Economy Sentiment Surges Again
  • UK: Price Rises Over-Dressed in Oct-20

TMI Snapshots: US Defense Equity Sentiment Bottoming; Hydrogen Economy Sentiment Surges Again

By Elan Gore

  • Our US Defense Composite Indicator is showing signs of bottoming following pre-election uncertainty; the indicator is strongly correlated with defense prime equity relative returns
  • The momentum of decline was arrested immediately post-elections as “Blue Wave” predictions failed to materialize, followed on by Biden’s announcement of a relatively hawkish Pentagon transition team
  • Cyclical rotation and an October lull in Department of Defense contracting may have magnified the negative trend, but incoming data suggests the worst may be over
  • In October, our Hydrogen Economy Sentiment Indicator took a hit as the Nikola (NKLA) scandal unfolded and the GM/NKLA partnership was in doubt
  • Following some volatility in key hydrogen economy equities, our indicator surged in the MTD on a barrage of positive news flow from multiple auto & truck players, as well as hydrogen infrastructure news; though “Blue Wave” expectations of a supercharged renewables push were initially questioned, the theme resumed its rally in November 

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities. 


UK: Price Rises Over-Dressed in Oct-20

By Phil Rush

  • UK inflation increased by a tenth more than we expected in October to 0.7% y-o-y on the CPI and 1.3% on the RPI. Upside news in clothing prices is likely to be short-lived owing to the payback relationship into Novembers being the strongest of the year.
  • The extent of the seasonality around yearend remains a key uncertainty in our forecast profile. A return towards the target should only occur in the Spring amid sizeable base effects, while the inflation outlook is unlikely to threaten the BoE’s easing programme.

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