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Daily Chartbook #231
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
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1. Mortgage demand. "MBA mortgage applications -4.4% last week vs. +3.0% prior; first weekly drop since June 2."
2. Vehicle sales. US vehicle sales rose 20.2% YoY in June to 15.7 million.
3. Card spending. "Total card spending per HH was -0.4% y/y in the week ending Jul 1, according to BAC aggregated credit and debit card data."
4. Goldilocks. Inflation "has declined materially from elevated levels (nearly as much as during the GFC) but without much growth damage, creating something similar to ‘Goldilocks’ momentum for markets."
5. VC spending. "In the US, investors financed 3,011 startup funding deals last quarter, about a third fewer than a year ago. And they spent a lot less cash: $39.8 billion, down by nearly half from the same period last year."
6. Challenger cuts. "June job cut announcements +40.7k according to Challenger Gray…an 8-month low but still +25% higher y/y; YTD total +458.2K, worst first-half since 2020."
7. ADP employment change. "The US economy added a stunning 497k jobs in June...more than double the 225k expectation...That is the biggest monthly jump since Feb 2022."
8. Jobless claims. "US jobless claims rose 12k (from -3k revised prior) to 248k which was 3k above estimates. The continuing claims dropped 13k (from a -9k revised prior) to 1,720k which was 17k below estimates" and the lowest in 5 months.
9. JOLTs. "Jobs openings decreased in May to 9.8 million from 10.3 million in April. The number of job openings (black) were down 14% year-over-year. Quits were down 5% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for 'quits')."
10. Openings to unemployed. The job vacancy-to-unemployed worker ratio declined to 1.6 in May, the lowest since October 2021.
11. Services PMIs. "S&P Global reports that the US Services sector deteriorated marginally in June (to 54.4 from 54.9 in May), but did improve modestly intramonth from the 54.1 flash print. The ISM Services print was expected to rise modestly in June, but instead it soared to 53.9 (vs 51.2 exp)."
12. ISM under the hood. Prices paid dropped to the lowest level since March 2020.
13. Recession probabilities."Market-based indicators have priced in a 45% probability of a US recession in the next year."
14. Credit spreads vs. recession. "Credit spreads would not usually tell you a recession is coming until around three months before, on average."
15. Stocks vs. recession. "The S&P 500 traded around the low end of its average pre-recession range. Performance typically flattens 6-12 months before a recession begins."
16. Managed money vs. crude oil. "Hedge funds have been running a net short gasoil position and the largest combined crude oil short position since COVID."
17. US commercial petroleum. "Inventories fell 2.8 MMbbl last week, a slowdown vs last week's crude-driven draw but reasonably broad-based across all major products."
18. Yields surge. Treasury yields across all durations surged in response to today's strong economic data.
19. Investor Intelligence sentiment. "II bulls 54.9 & bears 18.3. Bull-bear spread (36.6) now at highest level since Aug 2021."
20. AAII sentiment. "AAII Bullish sentiment rose to the highest level since November 2021."
21. Equity positioning. "Systematic strategies and retail investors remain the main drivers behind the past weeks’ rise."
22. Institutional positioning. "There has been a sharp increase in net long positions on US equity futures by asset managers and leveraged funds as they appear to have capitulated on their previous bearish stance and turned OW."
23. Active managers. The NAAIM Exposure Index increased to 83.1 from 75.9 last week.
24. Highs vs. lows. "52 Weeks Highs-52 Week Lows hit their highest level of 2023 last Friday at +209. Now back into the red. We will see where this closes over the coming days..."
25. Non-profitable tech vs. real rates. Non-profitable tech "is up 26% since early May vs the S&P 500 Ex Top 7 as high beta stocks and tech stocks have done well. This has happened with 10yr real rates rising, but now they are back through 2022 highs."
26. EPS vs. DXY. "One bullish development for earnings and revenues is the dollar. The DXY has weakened lately, which is a tailwind. This chart shows the dollar’s rate of change (reverse scale) against expected EPS growth."
27. Q2 EPS estimates (I). "Earnings estimates for the Energy sector have continued to edge lower and those for the Financials have also been cut recently, while those for MCG & Tech have been upgraded."
28. Q2 EPS estimates (II). Excluding Energy, consensus expects EPS to fall 2.2% YoY in Q2 (vs. -7.2% including).
29. SPX price target. "In a soft landing scenario, Goldman Sachs has set a price target of 4,700 by mid-2024 for the S&P 500."
30. Sector correlations. "S&P 500 sector correlations to the index have been declining all year and are now solidly in bull market territory. A geopolitical shock could change that, as could another round of concerns regarding Fed monetary policy."
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