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Only 25% of meals sold by restaurants are consumed on premises. The remaining 75% are delivery orders, see chart below and here.
Sources: National Restaurant Association – From Trend to Transformation: Off-Premises Dining Now Essential for Restaurant Consumers, Operators, Apollo Chief Economist See important disclaimers at the bottom of the page.
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One consequence of a shrinking population in Japan is that there are more and more vacant homes, see chart below.
Note: 2030 forecast based on UN population growth estimates. Sources: Japanese Ministry of Health, Labor & Welfare, United Nations Department of Economic & Social Affairs (UNDESA), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Our chart book, available here, summarizes our current outlook for public and private markets.
See important disclaimers at the bottom of the page.
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If 3,000 unauthorized immigrants are deported every day, the labor force will decline by roughly 1 million people in 2025.
Lowering the labor force by 1 million will reduce the participation rate by 0.4 percentage points, which will lower the unemployment rate, lower job growth, and increase wage inflation, particularly in the sectors where unauthorized immigrants work—namely construction, agriculture, and leisure & hospitality.
In short, deportations are a stagflationary impulse to the economy, resulting in lower employment growth and higher wage inflation.
For more discussion and quantification, see this new working paper by Edelberg, Veuger, and Watson.
Sources: ICE, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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With the use of stablecoins growing rapidly for payments, cross-border transactions, and remittances, the global US dollar stablecoin market could grow significantly over the coming years.
This also means that US dollar stablecoins could be used more widely as a means of payment in Europe, Japan, Canada, Australia, and emerging markets.
As a result, the global growth in demand for stablecoins could become a significant new source of demand for short-term US government debt.
Academic papers find that large inflows into stablecoins lower three-month T-bill yields by 2 basis points within 10 days.
The bottom line is that stablecoin demand for T-bills could grow into trillions, and the likely result is a steeper curve with significant new demand in the front end.
For more discussion, see the resources below.
- Bank for International Settlements working paper
- Federal Reserve notes on stablecoins
- European Central Bank paper on stablecoins
- International Monetary Fund paper on crypto regulation
Sources: Tether, Circle, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The concentration in the S&P 500 has returned to extreme levels, with the top 10 companies accounting for 40% of the index’s market capitalization and a record-high share of earnings, see chart below.
The extreme index concentration in tech is obviously not good for investors seeking to diversify their investments across 500 different companies. Anyone investing in the S&P 500 index today is basically making a bet on the Magnificent 7 stocks propelling even higher.
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The consensus economic forecast is that growth will slow down over the coming quarters as higher tariffs weigh on earnings, capex spending, and consumer spending.
The consensus equity analyst forecast is that earnings will accelerate over the coming quarters, see chart below.
This is not consistent. Either the MBA forecasters are wrong about corporate earnings, or the PhD economists are wrong about tariffs slowing down growth.
The second-quarter earnings season will start next week and reveal who is right. If earnings continue to be strong, the adverse effects of tariffs, as expected by economists, will prove to be incorrect.
In other words, either the equity analysts are too optimistic, or the economists are too pessimistic.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The bond market continues to price the next Fed move to be a cut, with the expectation that growth is slowing down.
But the stock market is trading cyclicals higher relative to defensives, with the expectation that growth is about to accelerate, see chart below.
This is not consistent. Either the bond market is wrong, and rates must move higher due to accelerating growth. Or, equity markets are wrong, and stocks have to move lower because growth is slowing down.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Since December 2024, the share of China’s exports going to the US has declined from 15% to 9%, while the shares of Chinese exports to Asia, Europe, and Latin America have increased, see chart below.
Sources: China General Administration of Customs, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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There is already upward pressure on inflation from tariffs, oil prices, and immigration restrictions, and the chart below shows the impact on inflation of a 10% and a 20% depreciation in the dollar. The bottom line is that we should see inflation move higher over the coming months; that is what the consensus expects, what the Fed expects, and what we expect.
Note: 5% depreciation shock applied to Q1, Q2, Q3, and Q4. Sources: Bloomberg SHOK model, Apollo Chief Economist See important disclaimers at the bottom of the page.
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