Daily Chartbook #201
Daily Chartbook #201
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Treasury cash. "The treasury cash balance is $18bn away from Yellen's minimum balance redline of $50bn. That's one day of spending."
2. Sales Managers Index. "The World Economics SMI index shows almost no growth in US business activity this month."
3. Unemployment vs. GDP growth. "Unemployment has risen after every tightening cycle historically and continued to rise for 34 months post the end of tightening in each of the last two major cycles."
4. Job loss estimates. "The economy will shed some 1.7 million jobs over the next year and a bit—roughly 120,000 a month—according to the average forecast of economists who expect a downturn."
5. CRE vulnerability. "Which commercial real estate sectors are most exposed to tighter credit conditions?"
6. IG bond issuance. "It's the busiest week of the year so far for investment-grade corp bond deals...Borrowers are trying to squeeze in deals before the debt ceiling."
7. US M&A deals. "Activity decreased in April, going down 20.4% with 1,029 announcements compared to 1,292 in March. However, aggregate M&A spending increased. In April, 110.3% more was spent on deals compared to March."
8. Lending standards. "This last rate hike was the first time in the history of the SLOOS that Fed tightening policy with lending standards this tight. This year is also the first time the Fed tightens with S&P 500 earnings that are trending lower."
9. USD versus. "The best and worst major emerging currencies against the US dollar."
10. Regional banks. "US regional banks are more oversold relative to the S&P 500 right now than they were either during the 2008 Financial Crisis or 2020 Pandemic Crisis."
11. Baby bubble. “BofA said AI for now is a 'baby bubble,' noting that in the past bubbles always started with ‘easy money’ and ended with rate hikes.”
12. Tech flows. Inflows to tech remain strong.
13. Global tech flows. "Global technology ETF and mutual funds had $3.768 billion worth of inflows last week."
14. Cumulative equity flows. "Equity flows have flattened…just like in ’07, ’15, ‘18."
15. Mutual fund and ETF flows. "Where all the money has gone this year."
16. Equity allocation. "Equity allocation from BofA's private clients remains at 60%."
17. Hedge fund holdings. "Reported first quarter 13F holdings for hedge fund managers. The sector percentages are based on 1,149 SEC filings with an aggregate market value of around $2 trillion."
18. Open interest ratio. "Open interest has been on the rise. A peak in this indicator has led to market tops throughout the 2022/23 bear market."
19. Megacap call volumes. "It's almost like every Friday speculators try to squeeze mega cap tech higher. Look at that predictable sequence of call volumes surging."
20. Nasdaq call volume. "NASDAQ call volume hit the highest levels since 2014 [yesterday]."
21. Nasdaq breadth. "Despite the 25% NASDAQ rally since December, just over one-third of NASDAQ stocks are trading above their 200-day moving average."
See:
22. Nasdaq 100 breadth. The Nasdaq 100 "achieved 52-week high yesterday, with the highest number of stocks in the index achieving 52-week highs since the market bottomed October 13, 2022."
23. SPX trading band. "The 1 month trading band hasn't been this tight in years...historically, this level of “coiled spring” has a short lifespan... now it’s just a question of breakout or breakdown."
24. Performance concentration. "I know the 'only a few stocks driving returns' narrative sounds scary but according to Empirical Research, there really isn't much to read into forward returns when trailing performance has been concentrated in the top of the market."
25. Cyclicals vs. defensives. "Biggest 2 day move since November for the cyclicals vs defensives trade."
26. Inflation trades. "Inflation trades, such as TIPS and energy versus tech, which were performing well, are now considerably off their recent highs."
27. 60/40. The 60/40 portfolio has rebounded sharply in 2023.
28. Post new high. Stocks were higher a year later 14 out of 14 times after new 52-week highs were made following >6 months without one.
29. Forward PE. "S&P 500 forward P/E is in the 85th percentile vs history. This means that compared to historical levels, US stocks may be considered expensive."
30. 2024 scenarios. And finally, “in our baseline scenario earnings rise by 5% and PE contracts to 17x.”
Have a great weekend!