Daily Chartbook #206

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

As a reminder: DC will not be published on Monday, May 29.

1. TSA checkpoint. "There was an average of over 2.49 million US airline travelers per day over the last week, the highest number since August 2019."

2. Chapter 11. "Twenty-seven large debtors have filed for bankruptcy so far in 2023 compared to 40 for all of 2022."

3. Personal income & spending. "Personal Income and Spending were both expected to rise significantly on MoM basis and did but spending soared 0.8% MoM. Spending and Income on a YoY basis both rose in April."

4. Spending categories. "A look at where Americans spent their dollars in April. Real spending by category."

5. Wage growth. "April Private wages up 5.6%, up from 5.3% in March...April Government wages up 5.3%, up from 5.1% in March."

6. PCE (I). Headline and core PCE both came in higher than expected, rising 0.4% each in April (the largest monthly gains since January) with both readings ticking up YoY.

7. PCE (II). "Core PCE services excluding housing, a widely watched measure because it strips out goods (which are slowing) and shelter (expected to slow), rose 0.42% in April" and is running at 4.4% on a 3-month annualized basis.

8. PCE (III). "Cyclical core PCE inflation, which tracks inflationary pressures that are linked to the current economic cycle, is at the highest on record going back to 1985."

9. Durable goods (I). "April durable goods orders +1.1% m/m vs. -1% est. & +3.3% prior (rev up from +3.2%); core orders (ex-transportation) -0.2% vs. -0.1% est. & +0.3% prior … year/year trend for headline orders (orange) has softened to +2.9%."

10. Durable goods (II). "Most notable was the value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, which soared 1.4% last month (although YoY was the lowest since Dec 2020)."

11. Consumer sentiment. "UMich Consumer Sentiment Index (blue) revised higher for May, up to 59.2 vs. 57.7 initially; expectations (orange) up from 53.4 to 55.4."

12. Inflation expectations. Consumers' expectations for 1-year ahead inflation fell to 4.2% from 4.6% while those for 5-year ahead inflation ticked up to 3.1% from 3%.

13. Q2 GDP. "The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2023 is 1.9 percent on May 26, down from 2.9 percent on May 17."

14. Fed funds rate. "We still expect the Fed to keep policy rates unchanged at its June meeting, but it is a close call. We see three conditions for a Fed hike. 1) strong data, 2) a debt ceiling increase, and 3) subdued regional bank stress."

15. Basis trade. "Hedge fund short positioning in futures markets hits record."

16. USD overvalued. "The dollar’s real-effective exchange rate continues to look expensive on a long-term basis, even after the last eight-months’ sell-off."

17. Global equity flows. "Global equity flows now flat YTD, in contrast to big inflows of $175bn in '22, $949bn in '21 and $182bn in '20."

18. Equity fund flows. "US equity funds and ETFs saw weekly inflows of $0.92 billion."

19. Equity positioning. "Retail investor positioning remains light."

20. Active managers. The  NAAIM Exposure Index increased to 65.5 from 59.

21. Private client flows (I). "BofA private clients continue to be modest sellers of stocks in 2023, sitting out the equity highs & lows in high-yielding cash & fixed income instruments."

22. Private client flows (II). "BofA’s private clients have been dumping energy stocks."

23. Q1 earnings (I). "Corporate America's ability to maintain profit margins was again demonstrated by a robust 1Q 2023 earnings report, beating expectations by a wide margin."

24. Q1 earnings (II). With 97% of the S&P 500 reported, the earnings and revenue growth rates are -2.1% and +4.15%, respectively. 

25. Sales and earnings growth. Year-over-year "sales and earnings growth [for the largest 5 S&P 500 stocks] have been lagging compared to the rest of the index."

26. Earnings progression. "If the consensus estimates are to be believed, earnings growth is bottoming now and will return to a 10% growth rate in 2024. Looking at it another way, we see the progression of calendar year estimates. You can see that the 2023 estimate has flattened out in recent weeks."

27. Growth divergence. "If S&P 500 Growth ($IVW) and S&P 500 Pure Growth ($RPG) is diverging, the market is looking for more than just growth ... profitability? stability? "

28. SPX vs. defensives. "New 52-week lows across the board for the most defensive stocks relative to the market: Utilities, Healthcare, Consumer Staples, Low Volatility all new relative lows today."

29. SPX breadth bias. "S&P 500 is still moving sideways. So long as net new highs are below the zero line, the breadth bias is lower."

See:

30. Tech vs. the field. And finally, “the only other times when the tech sector surged over 4% while overall stocks declined were at the onset and in the middle of the Tech Bust.”

Have a great weekend!