Daily Chartbook #183

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

1. NAHB Housing Market Index. The index "rose for the 4th consecutive month, reflecting increasing homebuilder confidence. Major reason: lack of existing supply, with new construction representing 33% of current housing inventory vs. a historical average of a little over 10%."

2. CRE debt. "Commercial Real Estate is NOT, I repeat is NOT the same sized problem it was thirty 30 years ago. CRE mortgages are WAY below the percentage of outstanding total mortgages than when the CRE recession hit in 1990."

3. Global supply chain. "GEP Global Supply Chain Volatility Index continues its descent as supply conditions improve. The index’s demand component has trended upwards since Dec ’22, suggesting vendor order books are stabilising after a period of aggressive inventory drawdowns."

4. Misery. "So-called 'Misery Index' (combines unemployment rate and year/year CPI rate) falling swiftly and now at 8.5% as of March."

5. Regime model. "Bloomberg Intelligence Economic Regime Index indicates US recession may have started mid-'22, already passed its worst."

6. Rate scenarios. "Fed Funds Futures are starting to back away from their assumption of multiple rate cuts by year end 2023."

7. Empire State manufacturing (I). "The headline general business conditions index shot up thirty-five points to 10.8. New orders and shipments surged."

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8. Empire State manufacturing (II). "For those wondering, this was a 11 sigma beat to the consensus median."

9. Empire State vs. ISM. "While the index is notoriously volatile, the sheer size of the spike increases the odds that ISM Manufacturing will go up in April."

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10. CTAs vs. copper. "CTAs have been boosting their bets on copper."

11. Gold miners. "Gold is signaling underlying strength. % of GDX components with a rising 200-day MA has cycled from 0 to over 80 in short order."

12. Hedge funds vs. USD. "Leveraged funds were net short all major currencies against the dollar last week, the first time that’s occurred since January 2022."

13. FX options vs. USD. "Foreign exchange options positioning has turned bearish dollar across the board."

14. SPX liquidity. "SPX liquidity has improved dramatically over past weeks. Haven't seen these levels in a long time."

15. Call option volume. "Call option volumes surged again to all-time highs this last quarter. This level of interest in derivatives is highly associated with the current retail trading frenzy."

16. Short interest. "Median S&P 500 short interest remains low at 1.7%."

17. Equity fund flows. "Investors have pulled cash from US equity mutual funds and exchange-traded funds in 11 of the year’s first 15 weeks."

18. Equity futures positions. "Leveraged funds and asset managers are far from running big longs, on the contrary actually."

19. Consolidated equity positioning. "Overall equity positioning has moved higher over past weeks, but we are still not even at neutral."

20. Stock positioning. Goldman's sentiment indicator remains in negative (light positioning) territory.

21. Hedge fund optimism. "Hedge fund sentiment is as excessively pessimistic as it gets."

22. SPX vs. Fintwit. Finance Twitter is slightly less bearish US equities.

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23. SPX vs. inflation peaks. "Lots of skepticism about the recent market rally, but actually, it's tracking historical trends of post-inflationary peaks both with or without a recession. The bottom is likely in."

24. Up days. "The stock market is beginning to ‘feel like a bull market’ as the % of up days (of the past 20) reached 65% last week -- the highest figure since Nov 2021."

25. Sector relative strength. "The sectors that typically perform the best at the end of bear markets have been improving."

26. Sectors vs. recession. "Looking at past recessions, the retail sector has on average fallen by the most in the six months after a recession starts.

27. Bad breadth (I). "S&P 500 currently higher than where it was in November … back then, though, >90% of members were above their 50d moving average; now 55% are above their 50d moving average."

28. Bad breadth (II). And finally, “the percentage of stocks outperforming the S&P 500 on a three-month rolling basis is the lowest on record.”

Thanks for reading!