Daily Chartbook #148

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

1. New home sales (I). Sales of new homes jumped 7.2% in January (vs. +0.7% expected). Year-over-year sales were down 19.4%.

2. New home sales (II). "Median price for new single-family home fell by 8.2% month/month in January … largest drop since September 2014".

3. Food prices. "What goes up rarely comes down in the grocery business".

4. Rate probabilities. "Options are pricing in a significantly higher chance that the Fed will raise rates to ~5.37% by the end of this year".

5. Recession probabilities. "The probability of a US recession in 12 months, calculated from the yield curve, stands at 62.7% in February".

6. Recession indicators. "In terms of NBER tracked data, 6 out of 6 are higher on the latest reading, and 4 out of 6 are at post-Covid highs".

7. PCE (I). Both headline and core PCE prices rose more than expected in January, fueled by services.

8. PCE (II). "Headline & core PCE inflation came in at 5.4% & 4.7% y/y, respectively. Higher than expectations and higher than previous month. First uptick in several months".

9. PCE (III). "PCE core services ex-housing (Fed’s most-watched measure currently) moved higher in January, with 3m annualized % change (orange) moving up to +5.2% and 6m annualized % change (purple) moving up to +5.4%".

10. Personal income & spending (I). "January personal income (blue) +0.6% m/m vs. +1% est. & +0.3% prior … personal spending (orange) +1.8% m/m vs. +1.4% est. & -0.1% prior (rev up from -0.2%); strongest gain for consumption since March 2021".

11. Personal income & spending (II). "Real personal spending in January +1.1% m/m, which was strongest gain since March 2021".

12. Personal savings. "The saving rate ticked up again in January. It's still below prepandemic levels, so I wouldn't overinterpret the monthly moves. But taken on its own, the rebound does suggest at least *some* caution from consumers".

13. Wage growth. "Wages for private workers accelerated for the first time in 4 months, up 6.9% Y/Y, from 6.3% in Dec, but wage growth for govt workers slowed to 5.0% Y/Y, from 5.1%".

14. Consumer sentiment. The index rose to its highest since January 2022 but remains 20 points below its historical average, while current conditions and expectations both increased. 

15. G1 GDP. The Atlanta Fed's GDPNow estimate for Q1 GDP growth moved up to 2.7% from 2.5% driven by consumer spending and business investment.

16. US petroleum inventories. "Inventories are still at the lowest seasonal level since 2005 and -235 million barrels (-13% or -2.22 standard deviations) below the prior ten-year average, but the deficit has narrowed from -291 million barrels (-16% or -3.06 standard deviations) on Dec 30".

17. Weakening USD. "Investors say the dollar is on the way down because the bulk of Fed rate increases is over".

18. USD vs. global breadth. "US dollar is just a few points off its low and the percentage of global markets above their 50-day average has already collapsed".

19. Rise of 0DTE. "0DTE options trading in the S&P 500 rose significantly after the COVID crash".

20. Risky tech. "Short covering isolated to few days, but we haven’t seen widespread reduction in crowded short exposure one expects given how sharply high-short interest names rallied".

21. Hedge fund credit and fixed income exposure. "Investors are getting more bearish on Credit".

22. Equity fund flows. "US equity funds and ETFs saw outflows of -$6.72 billion this week".

23. Rotation. "Investors are rotating from US equities to money markets, bonds, and foreign equities".

24. Dividend stocks. "Investors poured a net $272 million into U.S. mutual and exchange-traded funds that buy dividend-paying stocks in the two weeks ended Wednesday".

25. 401ks. "The 401(k) millionaire club has shrunk by a third…The average 401(k) lost 20% of its value last year".

26. Fund manager performance. "Large-cap fund managers are off to a solid start".

27. Mutual funds. "Mutual fund returns are the most sensitive to high Growth stock performance in at least 5 years".

28. TARA. And finally, “the alternatives to equities have become significantly more attractive".

Have a great weekend!