Daily Chartbook #149

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

1. Pending home sales. Pending sales topped analysts’ estimates, jumping 8.1% in January for the biggest monthly gain since June. Year-over-year sales are down 22%.

2. Global freight. "Spot rates from Asia to the US West Coast" have "returned to pre-Covid levels…Short-term prices for containers from Europe to the US East Coast are still more than double what they were in late-2019".

3. US trucking. The cost to ship goods by truck in the US is still well above pre-pandemic levels. From Craig Fuller: "This largely includes contract rates and fuel. Contract rates will continue to deflate through the year".

4. Bottlenecks. "The GS Weekly Bottleneck Index is back early 2020 levels".

5. Durable goods (I). Orders fell by 4.5% in January which was worse than expected and the biggest drop since April 2020.

6. Durable goods (II). "Core Durable Goods (ex-Transports) jumped 0.7% MoM (+0.1% exp) - biggest jump since March 2022 (but YoY Core is up just 1.6%)".

7. Dallas manufacturing. "Index down to -13.5 vs. -9.3 est. & -8.4 prior; new orders fell further into contraction; prices paid ticked higher alongside wages/workweek; production dipped into contraction; employment fell into contraction for 1st time since June ‘20".

8. Q1 GDP. The Atlanta Fed's GDPNow model nowcast for GDP growth in Q1 is now 2.8%, up from 2.7% on Friday.

9. Recession probabilities. "57% chance of recession in the next 12 months implied by the near-term forward spread. It was 72% last month. Hard to know whether it pushed the likelihood out beyond 12 months, or reduced odds all together".

10. Fed funds odds. "Futures market continues to price in relatively high odds of 25-basis-points rate hikes at each of the next three FOMC meetings".

11. TARA. "$SHV is seeing significant inflows as shorter duration exposure becomes more attractive in this post-TINA inverted yield curve and rising rate environment".

12. Bonds' round trip. "The record-breaking global bond market rally since the start of the year has fizzled out…as investors reverse their views on the likely future path of interest rate rises".

13. HY outflows. "HY fund flows have witnessed their third worst week on record".

14. Cumulative inflows. "Over the past year, investors have flocked to cash and sold stocks and bonds".

15. Sector rotation. "Hedge funds have been buying US Info Tech and selling US Financials for 7 consecutive weeks".

16. Equity allocations. "While equity allocations have come down, they remain well above average, and far above what would be expected in a capitulatory bear market".

17. Fund equity exposure. "Fund exposure to the equity market remains low but is increasing".

18. Consolidated equity positioning. "Aggregate equity positioning saw its biggest weekly decline in over three months".

19. CTA equity positioning. Meanwhile, "CTAs continue to boost their exposure".

20. Stock positioning. Goldman's sentiment indicator is slightly negative.

21. VIX call options (I). February has seen more VIX call options than any month since March 2020.

22. VIX call options (II). Which is "signaling persistent concerns about stock market downside risks".

23. High risk. "Investors who think stocks are attractive at current prices need to assume the NTM earnings cuts are done and will start to rise again in the next few months....The negative operating leverage cycle is alive and well and will overwhelm any economic scenario (soft, hard or no landing) over the next 6 months".

24. Buybacks. "Stock buybacks by companies in the S&P 500 are projected to top $1 trillion in 2023 for the first time in a calendar year".

25. Capital costs (I). "Cost of capital has increased for borrowers at the fastest pace in over 40 years".

26. Capital costs (II). "Corporates are concerned with the cost of capital".

27. Revenue vs. earnings. "Over the past 30Y, this is the first time consensus is calling for earnings compression out of the gate. In addition, this is a relatively rare instance of investors getting revenue growth at the expense of earnings".

28. GAAP gap. "For the 59% of stocks where adjusted EPS is higher than GAAP EPS, the size of the gap has grown to 30%".

29. Declining earning estimates (I). “US equities have gone nowhere since mid-November 2022"…but "Q4 2022 – Q4 2023 earnings projections have declined”.

30. Declining earning estimates (II). And finally, Barclays expects downward EPS revisions still have a long way to go.

Thanks for reading!