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Daily Chartbook #170

Catch up on the day in 28 charts

Daily Chartbook

Mar 29, 2023

Welcome back to Daily Chartbook: the day’s best charts & insights, curated.

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1. Case-Shiller (I). US home prices "fell for the 7th straight month (-0.42% MoM) leaving the home price index up 2.55% YoY (in January - this data is always very lagged) - the lowest growth since Nov 2019."

2. Case-Shiller (II). "The Composite 10 SA is up 2.5% year-over-year...The National index SA is up 3.8% year-over-year."

3. Container traffic. "US container ports handled loaded boxes amounting to 2.24 million twenty-foot equivalent units (TEUs) in February 2023, down from 2.77 million TEUs in February 2022, and the lowest for the time of year since 2015."

4. Balance of trade. "February goods deficit at $91.6 billion vs. $90 billion est. & $91.5 billion in prior month … exports -3.8% while imports -2.3%."

5. Treasury balance sheet. "The latest government report is out, and the US Treasury cash balance just reached another recent low. Only $187 billion left. Keep in mind that February's deficit alone cost $262 billion."

6. Inventories (I). "Retail advance inventories were $747.3B in February 2023, up 0.8% from January 2023 (seasonally adjusted)." It was the strongest monthly gain since August.

7. Inventories (II). "Wholesale advance inventories were $920.3B in February 2023, up 0.2% from January 2023 (seasonally adjusted)."

8. Fed vs. CPI. "On average, the Fed starts cutting rates six months after CPI peaks. Inflation, in this cycle, peaked nine months ago, and has since fallen by a third."

9. Inflation expectations. "Both survey-based and market-based measures of inflation expectations are falling quickly."

10. Consumer confidence (I). The index "bounced a smidge to 104.2. The Present Situation weakened a little from 152.8 to 151.1 while Expectations rebounded from 69.7 to 73.0."

11. Consumer confidence (II). "Since 1987, the only longer streak of net negative sentiment towards the stock market was surrounding the Financial Crisis."

12. Jobs talk. "Conversations have shifted from 'Labor Shortages' to 'Job Cuts' during S&P 500 company earnings calls."

13. Financial conditions ex-stocks. "After easing up early this year the Bloomberg Financial Conditions Index, excluding stock prices, is nearly one standard deviation tight, once again akin to the lows from the 2015-16 correction."

14. Financial conditions vs. stocks. "History says that a sustainable uptrend (‘New Bull Market’) can not begin until Financial Conditions have reached peak tightening."

15. Money market vs. Fed. "The prior two surges in money market fund assets, in 2008 and 2020, the Fed cut interest rates."

16. MOVE vs. VIX. "When the MOVE/VIX ratio tops 7.0, driven by the MOVE Index, US equities have underperformed US Treasuries by almost 6% in the next three months."

17. SPX vs. US10Y. "Rolling 20-day correlation between S&P 500 and 10y U.S. Treasury yield is hovering near highest since December 2021; last few moves into positive territory have been reversed relatively quickly, but steepness of recent increase hasn’t yet been seen in current drawdown."

18. SPX correlation. "S&P 500's rolling 1m correlation has started to move higher but is still lower than prior periods of stress in current bear market."

19. Sentiment indicators. "The most bearish thing one can say that this depressed level we saw several times in 2022 and that did not stop equities from going down."

Bearish sentiment — Goldman Sachs via TME

20. Investor flows. "Investors still diving into government bond ETFs, which have taken nearly 72% of all inflows over past month ... U.S. broad equity ETFs saw outflows over past week and precious metals saw relatively small inflow."

21. Risky vs. safe. Flows into risky assets continue to drop relative to those into safe assets.

22. Real estate L/S. "The long /short ratio has been fading for a long time, but there is more room to the downside should people decide taking the ratio to 2018/19 lows."

The real estate long — Goldman Sachs via TME

23. Lows > highs. "With a strong start in 2023, we have now seen 15 consecutive days with new lows > new highs... all while the $SPY has posted a higher low."

24. Megacap tech. "The weightings of MegaCap Tech names have helped prop up the SPX and the banking crisis has triggered a rotation into Secular Growth, specifically Tech."

25. ERP. "I keep seeing the top chart with ominous references to the ‘low equity risk premium’ and how this is bad for stocks. But if we look at the full history (bottom chart) we see something very different."

26. Earnings deceleration. "EPS revisions down again into the quarterly results."

27. Earnings slowdown. "As corporate earnings decline, embrace companies that have higher profitability/ROE, free cash flow, and interest coverage."

28. Earnings vs. GDP. And finally, “earnings estimates still point to record highs in the second half even as economic estimates increasingly point to a slowdown/recession.”

Thanks for reading!