Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Food prices. "Global Food Commodity prices have eased from record highs. But, we still have some ways to go."
2. EU forecasts. "The European Commission upgraded both inflation and growth forecasts, with no recession in sight."
3. Supply chain. "Our US supply chain stress tracker fell in April to its lowest since March 2021, due to a weaker economy and reduced logistics pressures. This will put downward pressure on goods prices and allow the Fed to pause in its tightening."
4. Fed funds rate vs. CPI. "Another clue the Fed is likely done hiking? Fed funds rate > CPI YoY ... finally. Each of the previous 8 cycles could stop once this was in place."
5. Inflation talk. "This is the lowest number of S&P 500 companies citing ‘inflation’ on earnings calls going back to Q2 2021."
6. Consumer expectations vs. market pricing. "Markets believe inflation is coming down. Consumers disagree."
7. Delinquent loans. "Most categories of household debt still either moving lower, or remain below pre-pandemic levels, and below trend."
8. Loan contractions. "Commercial and industrial loans just had one of their worst 2-month contractions in history. The only other times we have experienced a similar problem was during the three last economic recessions."
9. Deposits and lending. "With two months since SVB, the deposit (lhs) and lending (rhs) picture for US banks is BETTER than expected. Deposits have stabilized and prospects of Fed rate cuts will reinforce this."
10. Financial conditions vs. GDP. "After very volatile 2 years the GS Financial Conditions level now says that there will be very little impact on growth from FC for the next few quarters (obviously not taking into consideration eventual FC volatility though)."
11. Surprise. "The Citi US Economic Suprise Index, reflecting to what extent incoming macro data beats expectations, has turned negative for the first time since January. That's not great for stock markets. This means that reported macro data is currently slightly worse than expected."
12. Empire State manufacturing (I). New York's manufacturing survey collapsed to -31.8 (vs. -3.9 expected) suggesting April's +10.8 reading was a headfake. "Outside of the COVID lockdowns, this is the biggest MoM drop ever."
13. Empire State manufacturing (II). Under the hood: big drops in new orders, shipments, and inventories.
14. Empire State manufacturing (III). "Current conditions in the NY Empire Manufacturing Index look bleak; however, the six month outlook improved."
15. Corporate spreads. "BBBs yield 0.3 percentage points more than IG corporates at present, which is nowhere near the 0.4 danger zone where this market is sure that a recession is starting."
16. Default protection. Gold "is by far the top pick for those seeking protection in case Washington’s game of chicken over the debt ceiling ends in a crash."
17. Gold seasonality. "Gold is entering a seasonally weak period."
18. Best long-term investment. "Around 18% of Americans said stocks are the best long-term investment (compared with gold, real estate, CDs, bonds)-- lowest level in a Gallup survey since 2011".
19. Cash allocations. "Cash allocation from BofA's private clients remains below the long-term average."
20. Sentiment vs. positioning. "While sentiment dropped to its lowest level in decades, equity exposure has remained above average. Bad moods haven’t produced big portfolio re-allocations."
21. Equity flows. "Institutions have pulled a net $333.9 billion from stocks over the past 12 months...while individual investors have yanked another $28 billion."
22. Tech vs. SPX. "The Tech sector has made multiple new 52-week highs recently. Since 1989 there have only been six other instances in which Tech made 52-week highs with the S&P 500 not having done so in 12+ months."
23. Performance by size. "The smaller the stock, the weaker the performance. Micro caps are still under the Dec. '22 low and nearly 8% below the 200-day MA."
24. Lending vs. earnings. "The ‘Tightening C&I Lending’ sub series within the broader Senior Loan Officer Survey tends to lead actual trailing earnings growth by 2 quarters. This relationship points to a continued slowdown in earnings growth through year end."
25. Earnings growth (I). “Year/year S&P 500 ex-Energy EPS growth troughed in 4Q 2022 (the dots). So, stocks bottomed same quarter that earnings growth troughed.”
26. Earnings growth (II). "The median 1Q YoY earnings growth for companies in the top quartile by revenues was -4.2%, compared to +3.8% for companies in the bottom quartile (ex. Energy, Finance)."
27. EPS beat/miss reactions. "The market is not forgiving with companies that miss EPS estimates."
28. EPS guidance. More than 40% of S&P 500 companies have revised guidance higher.
29. EPS estimates. "It seems that analysts are now worried that US large caps have little to no earnings momentum in at least the current quarter and possibly further out."
30. Profits recession. "Wall Street is already enduring what could turn out to be the most prolonged corporate profits downturn in seven years."
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