Daily Chartbook #158

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1. Banks (I). "Banks are clearly getting the ebee-jeebies. Lending standards have tightened across all loan categories and are now at levels associated with prior recessions. The corollary to this is that loan demand has sunk for all these segments as well."

2. Banks (II). "The banking system remains flush with deposits."

3. Banks (III). "Unrealized losses at banks fell by about 10% last quarter, but remain quite elevated at $620.4B."

4. Banks (IV). Net unrealized losses for the Big 4 banks.

5. Household net worth. "U.S. household net worth -2.7% year/year in 4Q22, which is among worst declines on record back to 1950s … a year earlier, it was +15.3%, which was among strongest increases on record."

6. Strong consumer. "Credit card debt is declining as a share of income...the US consumer is in good shape, and there are no signs this is about to change anytime soon."

7. NFP (I). The labor market stays tight with 311k jobs added in February, well above market forecasts of 205k.

8. NFP (II). Payrolls have come in hotter than expected for 11 straight months.

9. NFP (III). "Manufacturing employment lost jobs for the first time since April 2021."

10. NFP (IV). "The industries with the highest and lowest rates of employment growth for the most recent month."

11. Unemployment rate. "The unemployment rate rose in February, but important to keep that in context -- at 3.6%, it's still near a 50-year low."

12. Participation rates (I). "Labor force participation rate rose in February from 62.4% to 62.5% … male participation up to 68%; female participation up to 57.2% (highest since pandemic started)."

13. Participation rates (II). "America's prime-age employment rate, which measures the share of working-age adults with a job, has FINALLY recovered to its pre-pandemic level of 80.5%."

14. Avg. hourly earnings (I). Average hourly earnings grew +0.2% in February, slower than expected (+0.3%) and the smallest gain since February 2022.

15. Avg. hourly earnings (II). "US Average Hourly Earnings increased 4.6% YoY in February. This will be the 23rd consecutive month where inflation has outpaced the growth in wages (YoY)."

16. US02Y. "Biggest 2-day plunge in 2-year yields since 2008."

17. Rates vs. equity vol. "Rates vs. equity volatility looks particularly extreme in an historical context."

18. Downside volume. "15-to-1 downside volume [yesterday]. First that was more than 9-to-1 since December, worst downside volume since September."

19. Risk appetite. "Risk appetite has been on a rapid rise. Animal spirits in the market is the last thing the Fed wants to see."

20. Hedge fund L/S (I). "Hedge funds have been reducing their exposure to the market for some time."

21. Hedge fund L/S (II). “Hedge funds are quite short financials.”

22. CTAs equity positioning. "Moving in perfect tandem, but the computers always with a lag."

23. Cash is king (I). "Money market funds have seen the best start to the year...ever."

24. Cash is king (II). "US money market funds surging to all-time highs."

25. High beta. "The S&P 500's highest-beta members outperformed its lowest volatility members by a near record 18% in the first two months of the year. The only other time high beta outperformed low volatility this aggressively while rates were rising was in late 1999."

26. S&P Fwd P/E. "The forward 12-month P/E ratio for the S&P 500 is 17.2. This P/E ratio is below the 5-year average (18.5) and below the 10-year average (17.3)."

27. Q1 earnings. "For Q1 2023, the estimated earnings decline for the S&P 500 is -6.1%. If -6.1% is the actual decline for the quarter, it will mark the largest earnings decline reported by the index since Q2 2020."

28. Nasdaq vs. Dow. And finally, today’s Nasdaq is "following the Dow Jones set up from 73/74 pretty much perfectly."

Have a great weekend!