Daily Chartbook #169
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1. Lending standards. "US banks have tightened lending standards in autos and credit cards this quarter, which will weigh on consumers’ ability to spend."
2. Recession odds. "Our baseline expectation is that reduced credit availability will prove to be a headwind .. not a hurricane that pushes the economy into recession. .. we have moved our subjective probability that the economy enters a recession in the next 12 months back up to 35%."
3. Bank deposits (I). "Deposits in the banking sector have declined by almost $600bn since the Fed began to raise interest rates, the biggest banking sector deposit outflow on record."
4. Bank deposits (II). "Deposits at commercial banks are now down 3.33% year-over-year, the biggest YoY drop on record and double the prior record from 1994. But...deposits remain up 30% (~$4.1 trillion) from pre-COVID levels."
5. Bank deposits vs. GDP. "The level of deposits as a share of GDP is now below its pre-pandemic trend, suggesting that households now have lower levels of liquid cash available than they did just a few months ago."
6. Q1 GDP. "We lowered our Q1 GDP tracking estimate by 0.1pp to +2.4% (qoq ar), reflecting weaker-than-expected capex shipments details in the February durable goods report."
7. Dallas manufacturing. "For the 11th month in a row, The Dallas Fed Manufacturing Outlook survey printed negative (signaling contraction) in March, dropping to -15.7 (from -13.5), significantly below the -10.0 expected bounce."
8. Corporate spreads. "US corporate credit spreads are stable and remain well below prior levels which signaled a looming recession or systematic problems in the US/global banking system."
9. Steepening. "The yield curve is headed for its steepest monthly increase since October 2008."
10. Gold ETFs. "March is set to be the first month of net inflows into gold ETFs for 10 months, while the volume of bullish options bets tied to the funds has approached record levels."
11. Copper supply. "Global copper stockpiles will deplete by August if the present trend continues."
12. Copper prices. "Copper prices are expected to reach a record high this year, driven by a resurgence in Chinese demand, which may further deplete already low stockpiles."
13. Poor liquidity. "Liquidity remains extremely poor. This will magnify all moves, both ways."
14. Safety. "More than $286bn has flooded into money market funds so far in March," the most since the height of the pandemic.
15. Seeking yields. "YTD mutual fund and ETF flows have favored yield-bearing assets."
16. Investor plans. The percentage of JPMorgan clients who plan on increasing equity exposure and decreasing bond duration are rising.
17. Equity positioning (I). "The GS sentiment indicator is back in 'must buy' territory."
18. Equity positioning (II). Consolidated equity positioning is at the 19th percentile.
19. CTAs vs. equities. "Same level as when the bear market rally started in Q4 last year."
20. Short flows. "Hedge fund short additions remain very elevated in the US."
21. Bank insiders. "Despite the headlines and panic, bank insiders have been buying bank stocks as soon as this new 'crisis' started."
22. Real estate. "FMS investors most bearish real estate since Oct'20."
23. Sector rotation. "Cyclicals like energy and financials lagging as investors allocate into more defensive parts of the market. Since the market's highs in early February, low volatility large caps have outperformed their high beta peers."
24. Equal-weight. "Much of last year's equal-weight S&P 500 outperformance vs. the market-cap weighted S&P was wiped out this month. We're basically back to where we were in Apr 2022, with the big names holding things up."
25. SPX vs. NDQ. "After underperforming S&P 500 in 4Q22 by most since 2002, NASDAQ 100 is having best quarter vs. S&P 500 (thus far) since 1Q09."
26. Tech P/E. "S&P 500 Tech sector’s forward P/E has climbed by 30% since October."
27. Bad breadth. "Percentage of stocks trading above their 50 day moving average stays rather depressed."
28. First to worst. And finally, “2023 Has Been Polar Opposite to 2022.”
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Very useful reading for everybody interested in financial markets. The author has been doing an excellent job in compiling the most important charts of the day.