Daily Chartbook #107

Welcome back to Daily Chartbook: macro market charts, data, and insights pulled from various sources around the Internet by a solo retail investor.

1. Then vs. now. In the last housing crisis, "11 million homes fell below their mortgage balance .. Home prices would have to fall between 40% and 45% from their peak to put the same proportion of mortgaged homes underwater today".

2. Weak homebuilder confidence (I). The Housing Market Index fell for the 12th straight month to 31 (just one tick above the pandemic low) for its lowest reading since mid-2012 (excluding the pandemic).

3. Weak homebuilder confidence (II). "Present sales decreased, matching the lowest level since mid-2012, while a gauge of prospective buyer traffic remained weak. The outlook looks somewhat less bleak as sales expectations for the next six months rose for the first time since April".

4. Weak homebuilder confidence (III). "Looking at homebuilder sentiment in year/year terms (orange), we have never seen this kind of change (to downside) for [NAHB] Housing Market Index".

5. Weak homebuilder confidence (IV). Plummeting homebuilder confidence suggests higher unemployment ahead.

6. CEO foreshadowing. "CEO expectations point to a slowdown in capex in coming quarters".

7. Goldman optimism. "Goldman is not so bearish on the economy".

8. Financial conditions (I). "Our estimate of the growth drag from financial conditions is peaking this quarter and fades in 2023".

9. Financial conditions (II). "The lags from financial conditions to growth are short and the peak effect occurs after 2 quarters".

10. Accident prone. "It seems inconceivable we won’t have a big accident, especially after 10-15yrs old low/neg yields, more debt and surge of money into illiquid".

11. Recession clues. "The 3m30y curve is still flattening and 5s30s is still inverted, suggesting a recession is at least a few months away".

12. Low issuance volume. "Issuance of U.S. high-yield bonds has dropped to the slowest since 2008".

13. USD IG market. "Despite the November rally, total returns in the USD IG market remain on track for their worst year ever, at -14%, a level that is nearly three times the second greatest decline on record since 1974".

14. Junk vs. SPX earnings. "Higher junk bond yields indicate S&P 500 earnings trouble".

15. Market-cap vs. equal weight. "While the popular market-cap weighted indexes are stuck below overhead supply, their equally-weighted versions continue to outperform".

16. Nasdaq member lows. "37% of NASDAQ members hit a new 4-week low as of end of last week (highest share since end of September)".

17. Tech buying. For hedge funds, "this is actually the biggest buy of tech stocks (still short though) since last December".

18. Bitcoin flatlined. "Absolutely zero inflow from institutions".

19. Sector flows. "Funds flows into HC in 2022 have outpaced all other S&P 500 sectors".

20. Equity fund inflows. US equity mutual funds and ETFs "have attracted more than $100 billion in net inflows this year, one of the highest amounts on record".

21. Rebalancing. "Quarter end rebalancing is likely to create selling pressure for stocks as they outperformed in Q4".

22. Fund managers & asset allocators (I). Absolute Strategy Research’s quarterly survey has been "going since 2015, and now is the first time that the probability of stocks beating bonds over the next year has dropped below 50%".

23. Fund managers & asset allocators (II). "They think there’s a 70% probability of an earnings decline, which is the most bearish since the survey started".

24. Hedge fund allocation plans. "The top three money pools investors want to allocate to in 2023 are macro, credit and equity".

25. 2023 forecast. "Morgan Stanley’s team is now leaning toward its bear case forecast for earnings of $180 per share in 2023 compared with analysts’ expectations of $231...implying declines of 22% from its Friday close".

26. EPS forecast. "Goldman still sees $224 of SPX EPS next year".

27. Analysts ratings (I). Of "10,835 ratings, 55.3% are Buy ratings, 38.8% are Hold ratings, and 5.9% are Sell ratings … analysts are most optimistic on the Energy (63%), Communication Services (61%), and Information Technology (61%) sectors".

28. Analysts ratings (II). And finally, the two sectors with the highest percentages of buy ratings on December 31, 2021 (besides energy)—tech and communications—have seen the largest and fourth-largest declines this year, respectively.

Thanks for reading!

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