Please find the latest edition of Weekly Digest attached.
Global infections surge again but European numbers are improving. The global seven-day average number of new infections is now at 655k/day, the highest number since mid-January. Asia has now overtaken Europe with 259k infections/day. India is now at 125k infections/day, a record high for them and up 70% week on week. Brazil is at 70k/day, the US is at 68k and Turkey is at 50k/day (up 33% week on week). Europe is at 172k/day, down 13% week on week. It is not completely clear how the Easter weekend affected reporting of results, we need to wait a week or so to see if the European numbers have truly peaked.
House Prices Perform Well
The US housing market is still on fire. The latest US housing market data is extraordinary. Almost half of US homes are selling within a week of listing (shortest period on record) and median price growth in March was 17%, the fastest growth rate since 2012. 42% of homes sold for more than their list price, a record high:
The UK housing market is strong too. According to IHS/Halifax, UK house prices are up 6.5% year-on-year and are at a record high. UK home sale volumes were up 23% month-on-month in February and up 56% year-on-year. In addition, indicators show that enquiries, sales and new instructions all picked up sharply in March.
Office space is a different story completely. According to New York City revenue projections, office towers in Manhattan are worth 25% less than a year ago. According to the NY Times, Jamie Dimon (JP Morgan CEO/Chairman) wrote to shareholders that remote work would significantly reduce JP Morgan’s need for real estate and for every 100 employees they may only need 60 seats on average. 17% of office space in Manhattan is available for lease.
China Creates Its Own Digital Currency
China is the first major country to start to roll out a digital currency (still in trial phase though). It is completely trackable but also allows for some interesting monetary policy developments. As an example, an expiration date could be used, encouraging consumers to spend when economic activity dips.
February Global Electric Vehicle (EV) Sales Took an Unexpected Pause
A 23% sequential decline, however, nearly all attributable to the timing of the Chinese new year. Europe reclaimed its global #1 position in the EV market, while Tesla reclaimed its global #1 position amongst the large car manufacturers.
A key trend to watch in the view of my Research Team colleague Campbell Parry is the rise of small electric vehicles. In China, sales of the Wuling Mini and Great Wall’s ORA have accounted for almost a third of total EV sales this year so far. And it is not just China: new models outside China, such as the three-wheeler GT100 produced by Estonia’s Nobe (first photo below, with a 200km single charge range), ElectroMeccanica’s Solo (second photo) and the two-seater Microlino are about to start taking orders.
Why are we watching EV sales trends? It has negative relevance to the oil price via the impact on gasoline and diesel sales. In contrast, it reads positively for demand for copper (4-5x as much copper in an EV as there is in a normal internal combustion engine vehicle), and battery materials such as nickel, manganese, cobalt, graphite and vanadium.