Daily Chartbook #161
Catch up on the day in 26 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. US oil prices. "Oil traded below $70 this morning for the first time since December 2021."
2. Homebuilder sentiment. Builder confidence rose for the third straight month in March but remains below 50 (poor).
3. Stress indicators. "Quick summary of global market stress indicators: all of them point to mild systemic stress, potentially a mild US recession, none of them currently point to financial armageddon."
4. Hard landing. "When the facts change, my view changes. A financial accident has happened, and we are going from no landing to a hard landing driven by tighter credit conditions."
5. Retail sales (I). "February retail sales -0.4% vs -0.4% est & +3.2% prior (revised up from +3.0%)."
6. Retail sales (II). "US retail sales increased 4% over the last year, the lowest growth rate since May 2020 & below the historical average of 4.8%. After adjusting for inflation, though, the picture is much worse. Real retail sales declined 1.8% over the last year, the 6th consecutive YoY decline."
7. Retail sales (III). "Consumers pulling back most on home furniture/furnishing, restaurant outing, building materials, gas, clothing and cars. Buying a little more online."
8. NY manufacturing. "Empire State Manufacturing shrank way more than expected to -24.6 vs -7.9, contracting for a fourth straight month."
9. PPI (I). Producer prices fell by 0.1%, below market expectations of +0.3%. Core PPI rose by 0.2%, below estimates of +0.4%.
10. PPI (II). "Feb PPI came in at 4.4%, notably below the est of 5.2%. On top of that, Jan PPI was revised down."
11. CPI forecast (I). "We revise core CPI inflation up a tenth in both 4Q 2023 and 2024 to 3.4% y/y and 2.4%."
12. CPI forecast (II). "Barclays tweak up year-end core CPI from 3.2% to 3.3% but the important thing is that CPI inflation (YOY) has already peaked for headline and core."
13. Q1 GDP. "The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2023 is 3.2 percent on March 15, up from 2.6 percent on March 8."
14. Fed funds rate. "Change in the market-implied path of the Fed's target rate."
15. 12-sigma event. "The recent 3-day advance in the 1-3 year Treasury ETF (+1.88%) was a 12-sigma event. That basically means it should not have happened even once in the history of the universe."
16. Stocks vs. bonds (I). "US stock/long term bond correlations have been exceptionally high over the past 100 days (about 5 months)."
17. Stocks vs. bonds (II). Equities are increasingly oversold relative to bonds.
18. Equities vs. volatility. "Chart shows SPX forward returns per MOVE/VIX ratio levels (right now we are at 8...)."
19. SPX realized volatility. "1-month realized vol is starting to pick up."
20. CTAs vs. bonds. "CTAs have size bonds to buy, especially in the up scenarios."
21. Smart money vs. US energy. "Selling out longs, and pressing new fresh shorts in energy by the 'smart guys'."
22. Smart money vs. oil. "Heading into this week, hedge funds/CTAs had reduced short positions to a multi-year low. When hedge funds are this overextended, bad news becomes horrible news for oil."
23. Global equity valuations. "US still expensive vs history and vs the rest of the world, meanwhile EM and developed ex-US aren’t that far apart."
24. EPS growth. "Real EPS is still above a (very generous) trend EPS growth of 4.2% real EPS."
25. Negative EPS growth vs. performance. "One of the best times for future returns on stocks is when earnings are weak. Q4 earnings down about 13% YoY is the sweet spot for future returns on equities."
26. Seasonality. And finally, “over the past two decades, stocks have bottomed around the middle of March.”
Thanks for reading!