Daily Chartbook #176

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

1. US petroleum inventory monitor. "Fourth consecutive weekly US total commercial petroleum draw and also a new 2023 record. Total US commercial stocks fell 11 MMbbl last week, driven by sizable declines across all major product categories."

2. Oil squeeze. "3 sigma move and the crowd caught the wrong way."

3. Credit crunch. "More signs of a global credit crunch as syndicated loans fall to their lowest levels since 2010."

4. Next crisis. JPMorgan clients believe commercial real estate will be the cause of the next market crisis.

5. Debt levels. "Corporate debt is near two-decade lows...while household balance sheets remain strong...Government debt, on the other hand, has doubled since 2002 and sits at 120% of GDP."

6. Tax refunds. "The level of tax refunds to households tells us something about how much support there is to consumer spending…tax refunds in recent weeks have been running at a lower rate in 2023 than in previous years."

7. American workweek. "Americans are spending less time working than pre-pandemic, with the average US workweek dropping by more than a half hour over the last 3 years. What’s going on with weekly hours is 'a very significant part of the story why labor supply is so low.'"

8. ADP payrolls (I). "March ADP payrolls +145k vs. +210k est. & +261k in prior month (rev up from +242k) … declines in information (-7k), financial (-51k), manufacturing (-30k) and professional/bus. services (-46k) sectors; while leisure/hospitality led with 98k gain."

9. ADP payrolls (II). "Manufacturing and Financial Activities (regional banking collapse) dominated the job losses with The Southern region seeing major job losses (as well as medium-sized companies)."

10. Wage growth. "Wage growth for job stayers (6.9%) and job changers (14.2%) dropped to the lowest in one year."

11. Balance of trade. "Trade Deficit increased to $70.5 Billion in February...Exports are up 8% year-over-year; imports are up 1% year-over-year."

12. Services PMIs (I). "S&P Global Services PMI [blue] disappointed, falling from 53.8 flash to 52.6 final, but still up from February's 50.6 - and the highest since June 2022...ISM Services [green] disappointed too, dropping from 55.1 to 51.2 (54.4 exp)."

13. Services PMIs (II). Under the ISM hood, the employment, new orders, prices, and business activity subindexes all declined.

14. National Financial Conditions Index. The NFCI "was –0.13 in the week ending March 31, suggesting financial conditions continued to tighten."

15. 2-year vs. 3-month. "The 2yr vs 3m yield spread has only been more negative on one other day in the last 40 years. In 2001, the Fed announced a surprise 50 bps rate cut the next day."

16. 10-year vs. 3-month. "The 3-Month Treasury bill yield of 4.88% is now 1.53% higher than the 10-Year Treasury yield (3.35%).  With data going back to 1962, only March 7, 1980 (recession: Feb-Jul 1980) had a more inverted yield curve than today, and by just 4 bps."

17. Surprise Index vs. 10-year. "The Citigroup Economic Surprise Index suggests that yields are too low on the 10-year note."

18. 10-year vs. copper/gold. "The relationship between the bond yield and the copper/gold price ratio suggests that the yield could drop to 2.0%. We think that could only happen if the economy falls into a recession caused by a credit crunch. That's not our most likely scenario."

19. Reverse repo. "As of Wednesday, more than $2.2 trillion sat in the Fed’s reverse repo facility, paying a 4.8% annualized rate."

20. Money market flows. “Money market funds have seen $300 billion of inflows in the past three weeks.”

21. Retail retreat. "Stocks most held by retail ownership have seen poor performance over the past few quarters."

22. Global CTA positioning. "CTAs are most short stocks now, and are very likely to begin their LONG stocks phase soon."

23. MCG & Tech. "Deutsche Bank is bullish on mega-cap stocks (MCG & Tech = 'mega-cap growth and tech')."

24. Forward P/E (I). "Stocks still are not cheap."

25. Forward P/E (II). "S&P 500 forward earnings have not fully priced in a recession."

26. SPX dividends. "S&P 500 dividends hit another new high in the first quarter of 2023, up 7.9% YoY."

27. Buybacks decelerate. "Corp. client buybacks decelerated (typical in the weeks ahead of earnings) but were also below typical seasonal trends for the ninth straight week."

28. Nasdaq breadth. “The breadth of this rally remains very narrow. While buy signals are intact, it does suggest that upside is somewhat limited.”

29. SPX member outperformance. And finally, “only 25% of the 500 stocks have been outperforming the S&P 500.”

Thanks for reading!