Daily Chartbook #113
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Daily Chartbook #113
Catch up on the day in 29 charts
Welcome back to Daily Chartbook: macro market charts, data, and insights pulled from various sources around the Internet by a solo retail investor.
1. Mortgage demand (I). "The refinance index is at the lowest level since the year 2000".
2. Mortgage demand (II). "The purchase index is 12% below the pandemic low and at the lowest level since 2015".
3. Baltic Dry plunges. "The Baltic Dry Index's usefulness as a gauge of global demand, economic activity and inflation pressures is not what it once was. Still, yesterday's record 17.5% drop is remarkable".
4. Bottlenecks easing. "The weekly composite declined further (-6.0% w/w) in the most recent week. The average bottleneck score is down significantly from the Dec/Jan peak and continuing the trend of improved supply chains on a y/y basis".
5. Corporate distress. "Analysts talk about a huge pickup in corporate distress this year and next, but it's coming off an incredibly low base. US bankruptcy courts saw just 97 large insolvencies last year, tying 2014 for the slowest year since at least 2008".
6. Cash piles. "The low saving rate in the US is persistently misinterpreted as evidence that households are running out of cash. In fact, US household cash piles continue to grow at a robust pace, suggesting in aggregate that US households aren't drawing on savings to support spending".
7. JOLTs (I). "Job openings have fallen from their peak, but they remain very high by historical standards. The 10.5 million openings at the end of November was little changed from October, which was revised up".
8. JOLTs (II). "The ratio of job openings to unemployed workers held steady at 1.7 in November".
9. JOLTs (III). "The big story from this report is that quitting is no longer slowing down".
10. Child care issues. "This is the three-month rolling average of employed workers who are not at work due to child care issues...We are at levels now not seen since the fall of 2020".
11. Wage growth tracker. "Hourly wage growth rose 6.4% from a year earlier (unchanged from October) for all workers, but ticked up for job switchers—8.1% from 7.6%".
12. Manufacturing (I). ISM PMI reported a lower-than-expected 48.4 print for its second straight contraction and the ninth consecutive monthly decline, the latter is "the longest stretch of declines since 1974-1975".
13. ISM Manufacturing (II). "Under the hood, it was mixed with employment picking up modestly while prices paid and new orders plunged to COVID-lockdown lows".
14. ISM Manufacturing (III). "The sharp fall in the ISM prices paid component still points to a big drop in inflation".
15. Fed funds rate projections. The Fed's "Kashkari published his rate forecast: He went from 1% to 5.4% for 2023 in one year".
16. Post-FOMC probabilities. "Fed Funds are pricing a 70% chance of a 25 bps hike by the FOMC at their next meeting on February 1st".
17. Fed vs. market. "Fed may not want to cut in 2023, but economists and traders currently think otherwise".
18. Tightening cycles. "When the time came to reverse monetary policy in the face of high inflation, vol spiked triggering forced unwinds. The inertia of those unwinds defined the subsequent S&P trajectory. While the S&P is down 20% from its Jan22 highs, it is still 15% above the pre-COVID lows".
19. 10Y & 3M inversion. "Massive decline in the spread b/w the 10Y & 3M Treasury yields, creating a deeper inversion".
20. Fed pause. "Historically, equities will soften leading into (5-10% correction) and then rally post-pause. 2000 is the only exception. Back then, the market traded at 28x trailing earnings".
21. HY vs. S&P. "When High Yield is negative on the year, S&P 500 forward 12-month returns are quite strong the next year, since 1990. Average return = 22%. Median return = 27%".
22. Energy sector. "The 2-year rolling return for the energy sector surged to the highest level in history in 2022, with a gain of 227%. Keep in mind the highest 5-year rolling return ever recorded is 276%".
23. Foreign vs. US. "Foreign stocks now up 7% on the US stock market YoY".
24. Buybacks. "We are in ‘deep’ buyback black out window and it grows. GS estimates the black out period ends around Jan 27".
25. Earnings foreshadowing. "IF we are heading into a recession, as many of the indicators do suggest, then the decline in earnings has not priced that in as of yet".
26. Profits recession. "Corporate America is seen tilting into a profits recession this year, staring at 3 back-to-back quarters of negative bottom-line growth before recovering".
27. Bear market comps. "More serious risks of an economic slowdown have yet to be fully priced in".
28. Profit margins. "Market fundamentals keep deteriorating. Here you have the SPX profit margins".
29. Margin expansion. "Over the past decade, S&P margins have expanded by ~400 basis points. Nearly 100% of this is from the Tech and Comm Services sectors".
Thanks for reading!