Daily Chartbook #129

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

1. Gas prices. "We’re getting a ‘seasonally unusual pattern’ in gasoline prices".

2. New home sales. New home sales rose unexpectedly in December (+2.5% vs. -0.1% estimated) for the largest gain since October 2021.

3. Auto payments. "More Americans are falling behind on their car payments than during the financial crisis".

4. Labor shortage talk. "Sector breakdown of S&P 500 earnings call discussions about 'labor shortages...still elevated, but falling".

5. PCE (I). "Core PCE Deflator - printed pretty much in line with expectations (headline up 0.1% MoM was marginally hotter than expected). The year-over-year prints dropped to 5.0% and 4.4% respectively for headline and core - while both lower and trending down from the highs last year, these prints are still the highest since 1991".

6. PCE (II). "US PCE Deflator with Top 5 Sub-Component Contributors".

7. PCE (III). "Consumers spent a little + on gas, transportation & recreation services but pulled back on most other categories".

8. Personal income & spending (I). “Americans' income was expected to rise 0.2% MoM and spending drop 0.1% MoM and while incomes met expectations, spending was weaker than expected (-0.2% MoM). That is the second straight month of spending declines”.

9. Personal income & spending (II). "On a year-over-year basis, spending growth continues to outpace income growth".

10. Spending expectations. "Spending expectations has been a good predicator for inflation. And it’s been trending down sharply pointing towards a continuation in rapid disinflation".

11. Personal savings. The personal savings rate ticked up to the highest level since May 2022 but remains near historic lows.

12. Pandemic savings. "Households, in the aggregate, are still sitting on a lot of extra savings from the pandemic, at least when we extrapolate monthly savings figures. But it's hard to know how literally to take these numbers, especially as time goes on".

13. NBER update. "3 out of 6 higher and at post-Covid highs (employment and income), 3 lower (production and consumption/sales)".

14. Q1 GDP. Atlanta Fed's GDPNowcast now estimates 0.7% growth in the first quarter.

15. Recession signals. "Leading Economic Index -8% from peak .. signals hard landing will occur in ’23; but another tightening of financial conditions this spring may be required to tip a US economy currently growing >7% in nominal terms into the recession the consensus craves".

16. Bonds vs. recession. "The bond market is priced as though economic pullback is inevitable".

17. Recession vs. credit spreads. "But credit spreads...are predicting nothing of the sort".

18. Credit spreads vs. claims. "A rapid rise in claims (raising credit spreads) or outright cuts in rates by the Fed (steepening the curve) might begin to resolve this inconsistency".

19. Credit flows. "Strongest IG & HY inflows since Sept'21".

20. Record cash levels. "Funds sitting in money market funds. Where are we deploying this?"

21. EM inflows (I). "Emerging equity and debt markets have attracted $1.1bn a day in net new money this week".

22. EM inflows (II). "European stock funds had $3.4 billion of inflows in the week through Jan. 25".

23. Equity flows. "After a very unseasonal start to 2023 with January seeing large outflows from US equity funds (in stark contrast to normal seasonality where January is the strongest month), FOMO finally caught up".

24. Semis shorts. "Net positioning in US Semis stocks is near trough levels. Semis & Semi Equip stocks currently make up ~35% of the overall US Info Tech short exposure on the Prime book, vs. ~22% at the start of 2022; at the highest level in more than five years".

25. Capitulation. Tech and healthcare funds have seen large outflows.

26. Small traders. "Small traders call buying is at the lowest level seen since 2019".

27. Factor outperformance. “The 'new bull market' being led by the most volatile, lowest quality market components”.

28. Q4 earnings (I). Of the 29% of S&P 500 companies that have reported, 69% and 60% have topped EPS and revenue estimates, respectively.

29. Q4 earnings (II). And finally, the blended earnings declined 5% while revenue increased 3.9%.

Have a great weekend!