The Daily Spark

Want it delivered daily to your inbox?

  • Car Sales Very Strong

    Torsten Sløk

    Apollo Chief Economist

    Although car sales are very sensitive to higher interest rates, the data for auto sales shows no signs of a slowdown. This suggests significant support for auto sales from wealth gains for households via higher stock prices, higher home prices, and higher cash flow from fixed income.

    No signs of a slowdown in auto sales
    Source: Bloomberg, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Extreme Concentration in the S&P 500

    Torsten Sløk

    Apollo Chief Economist

    The top 10 stocks in the S&P 500 now make up a record-high 35% of the index, see chart below.

    The concentration in the S&P 500 is more and more extreme
    Source: Bloomberg, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • CRE in Trouble

    Torsten Sløk

    Apollo Chief Economist

    There are a lot of commercial real estate investments that need to be refinanced in 2024, see chart below. And rates higher for longer continue to have a negative impact across CRE.

    The CRE maturity wall is very steep
    Source: MBA, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Global Economic Outlook Improving

    Torsten Sløk

    Apollo Chief Economist

    The consensus probability of a recession has declined significantly in recent months and now stands at 30% for the US, Europe, and UK, see chart below.

    The consensus probability of a recession in Europe, UK, and the US has declined significantly in recent months
    Source: Bloomberg, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Daily TSA Travel Data Still Strong

    Torsten Sløk

    Apollo Chief Economist

    The TSA has daily data for the number of people scanning their boarding pass with a TSA agent, and it continues to show no signs of the economy slowing down, see chart below.

    US air travel: No signs of a slowdown
    Source: TSA, Bloomberg, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • For the past 12 months, the yield level for IG has been 5.5%, and the yield level for HY has been 8%, see chart below.

    The economic data over this period have been strong, so one conclusion is that firms and consumers have gotten used to a permanently higher cost of financing.

    However, higher rates will continue to negatively impact leveraged investments done when interest rates were zero, particularly CRE and REITs, where the pain will be felt for many more years.

    IG yield has been 5.5% for the past 12 months and HY yield has been 8%
    Source: ICE BofA, Haver Analytics, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Fed Expectations Moving Around a Lot

    Torsten Sløk

    Apollo Chief Economist

    Fed expectations have been on a roller coaster ride over the past 12 months, going from six cuts to two cuts to six cuts and now 1.5 cuts, see chart below.

    Fed expectations have been on a roller coaster ride
    Source: Bloomberg, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Removing the business cycle from the government budget balance shows that the US currently has a much bigger cyclically adjusted budget deficit than the Euro area, see chart below. In other words, despite the strong economy, the US is still running a significant deficit.

    If the US were to enter a recession, tax revenues would decline, and unemployment benefit payments would rise. Under that scenario, it is not unreasonable to assume that the budget deficit could reach 10% of GDP, as it did during previous recessions.

    Cyclically adjusted deficit is much bigger in the US than in Europe
    Source: IMF Fiscal Monitor, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Data from downtowns shows that cellphone activity in San Francisco is at 57% of pre-pandemic levels, see chart below. Las Vegas is at 97%, and Miami is at 82% of 2019 levels. The slow recovery of downtowns combined with rates higher for longer has important implications for retail, restaurants, and offices.

    Cellphone data shows that downtown activity is still significantly below 2019 levels
    Source: University of Toronto, Downtown Recovery, Apollo Chief Economist. Note: The recovery metrics on this website are based on a sample of location-based mobility data derived from cellphones. Metrics are computed by counting the number of unique visitors in a city’s downtown area in the specified time period, and then dividing it by the standardized number of unique visitors during the equivalent time period in 2019.

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


  • Japan owns $1.2 trillion of US Treasuries, and with 10-year interest rates on JGBs rising above 1% for the first time in more than a decade, Japanese investors will begin to find their own yen-denominated bonds relatively more attractive compared with US rates.

    Put differently, as Japanese yields move higher, the global savings glut will shrink, putting upward pressure on the US term premium, see also Bernanke’s speech from March 2013 discussing this dynamic.

    Any decline in USDJPY driven by such Japanese repatriation could be magnified once the Fed begins to cut interest rates. Then USDJPY would move lower not only because of higher long rates in Japan but also because of lower short rates in the US.

    The bottom line is that rising long-term interest rates in Japan put upward pressure on long-term US Treasury yields, steepen the US yield curve, and put downward pressure on USDJPY.

    For more, see also our chart book looking at Japanese demand for US Treasuries available here.

    Japanese 10-year yield
    Source: Bloomberg, Apollo Chief Economist
    When Japanese 10-year interest rates move up then USDJPY moves down
    Source: Bloomberg, Apollo Chief Economist
    Japan owns $1.2 trillion in US Treasuries. China owns $770 billion.
    Source: Bloomberg, Apollo Chief Economist

    Download high-res chart(s)

    See important disclaimers at the bottom of the page.


This presentation may not be distributed, transmitted or otherwise communicated to others in whole or in part without the express consent of Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”).

Apollo makes no representation or warranty, expressed or implied, with respect to the accuracy, reasonableness, or completeness of any of the statements made during this presentation, including, but not limited to, statements obtained from third parties. Opinions, estimates and projections constitute the current judgment of the speaker as of the date indicated. They do not necessarily reflect the views and opinions of Apollo and are subject to change at any time without notice. Apollo does not have any responsibility to update this presentation to account for such changes. There can be no assurance that any trends discussed during this presentation will continue.

Statements made throughout this presentation are not intended to provide, and should not be relied upon for, accounting, legal or tax advice and do not constitute an investment recommendation or investment advice. Investors should make an independent investigation of the information discussed during this presentation, including consulting their tax, legal, accounting or other advisors about such information. Apollo does not act for you and is not responsible for providing you with the protections afforded to its clients. This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any security, product or service, including interest in any investment product or fund or account managed or advised by Apollo.

Certain statements made throughout this presentation may be “forward-looking” in nature. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking information. As such, undue reliance should not be placed on such statements. Forward-looking statements may be identified by the use of terminology including, but not limited to, “may”, “will”, “should”, “expect”, “anticipate”, “target”, “project”, “estimate”, “intend”, “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology.