Daily Chartbook #134
Catch up on the day in 28 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. Electricity prices. "U.S. Retail Electricity prices remain near all-time highs, up 15% YoY".
2. Food prices. "UN index of food-commodity costs falls for 10th straight month".
3. NFP (I). The US added 517k in January, the most since July and well above expectations of 185k.
4. NFP (II). "The strong payrolls number (from the establishment survey) was supported by an even stronger number from the household survey".
5. NFP (III). Big difference between seasonally adjusted and non-seasonally adjusted change in payrolls.
6. NFP (IV). "Today's positive payrolls surprise is the biggest we have on record at +3.6 standard deviations, with the exception of exactly a year ago (+3.8). You don't get this kind of positive surprise if recession is imminent, so this report ends US recession fears".
7. NFP (V). "10 straight better than expected nonfarm payrolls reports, double the prior longest streak".
8. Unemployment. "The US Unemployment Rate moves down to 3.4%, the lowest level since 1969".
9. Participation rate. "Good to see an increase in the participation rate, still a ways to go to get to pre-pandemic levels".
10. Wages. "US Avg Hourly Earnings increased 4.4% YoY in January, the slowest growth rate since Aug 2021. This is the 22nd consecutive month where inflation outpaced the growth in wages (YoY)".
11. Labor market recovery. "The only industries with fewer workers than before 2020 are Leisure and Hospitality—which is getting out-competed on wages—and Government—which mostly reflects public schools' struggles to retain workers".
12. ISM Services PMI. "January ISM Services jumped to 55.2 vs 50.5 est & 49.2 prior (revised down from 49.6); employment rose to 50.0 vs 49.4 prior and new orders soared to 60.4 vs 45.2 prior".
13. Interest rates. "US interest rates are far too low across the entire yield curve if recession is NOT imminent. You can see that from the jump in 10-year yield today, which is double the 5 bps rise you'd expect given historical correlation. This also means the Dollar is far too weak".
14. Pricing pivots. "Traders are pricing in an abrupt end to global monetary tightening, with most developed-market central banks cutting rates within the next year".
15. 60/40. The traditional 60/40 stocks and bonds portfolio "appears to have broken decisively above the 200-day moving average".
16. Worst to first. "The biggest fallers in the last downdraft of 2022 are the biggest gainers in this rally".
17. Gold longs. "Hated gold has become loved. Just in time for the latest move lower. Pain is huge again".
18. EM inflows. "Emerging markets have just seen the highest inflows since 2017".
19. Bank buying. “[Hedge funds] have added to longs and covered shorts in US Banks. In fact, we saw sharp rise in net exposure to Banks from 12M lows to the 35th %-tile in the last two weeks as a result of the activity”.
20. AAII asset allocation (I). "Equity exposure (65.3%) was up for the third month in a row in January & is at its highest level since May".
21. AAII asset allocation (II). "Here's the chart showing levels over time and the long-term averages".
22. Buybacks boom. "In January 2023, announced stock buybacks more than tripled to $132 billion from a year ago, reaching highest total ever to start a year … surpasses previous January record (set two years ago) by >15%".
23. Pain trade. "The 'most painful trade' ’is always 'apocalypse postponed' .. rally “likely ends with pretty ‘peak Goldilocks’ inflation print (e.g. 0.1/0.2% on wages in Jan payroll); we say fade SPX >4.2k, Q1 highs likely before Valentines Day".
24. Forward P/E. "The US is trading above its long-term median valuation".
25. Forward sales. "Forward 12m estimated sales growth for S&P 500 hasn’t seen year/year % change dip close to 0% (like forward EPS estimates), but pace has slowed considerably over past year".
26. Q4 earnings update (I). With half of the S&P 500 reported, 70% and 61% have beaten EPS and revenue estimates, respectively.
27. Q4 earnings update (II). Blended earnings have declined 5.3% while revenue growth has increased 4.3%.
28. SPX vs. VIX. And finally, “although we've seen a record number of days when both $SPX and the $VIX were moving LOWER simultaneously, it has been less common to see them both move HIGHER, like yesterday. Given the amount of event/earnings risk taking place in such a short period, we were not surprised”.
Have a great weekend!