Daily Chartbook #242
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Daily Chartbook #242
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Mortgage rates. "The average rate for a 30-year fixed loan dropped to 6.78% from 6.96% the previous week, the highest level since November 2022."
2. Earnings vs. housing. Recent growth in real average hourly earnings suggests rising mortgage applications ahead. Strong housing demand "will raise the floor on real growth and inflation, and prove that the Fed’s insistence on the economy’s return to 2012-19 dynamics will be wrong."
3. Auto loans. "U.S. auto loan rejections have soared."
4. Global inflation. "We've come a long way from inflation peak in most economies."
5. Inflation swaps. "Inflation swaps imply that y/y [US] CPI will have a tough time falling much over the next few months, and in fact inch up over the summer. Expected to be near 2% in spring 2024 though.
6. Risk appetite vs. ISM. Global risk appetite is implying ISM new orders of ~60…
7. ISM vs. GDP. …which is implying 4% GDP growth.
8. Oil rig count. The Baker Hughes crude oil rig count fell to 530 from 537 making the lowest count since March 2022. It was the 6th consecutive drop.
9. Gold purchases. There have “been record central bank purchases of gold of 1,224 tonnes in the past four quarters to 1Q23.”
10. IG bond flows. Corporate IG bonds saw their first outflow in 16 weeks.
11. T-bill flows. BofA private clients sold a record amount to T-Bills over the past week.
12. Stocks vs. bonds. "Technicals show that stocks are very overbought relative to bonds."
13. Main Street vs. Wall Street. "There is a growing divide between optimism on Main Street and optimism on Wall Street. Despite being closely aligned for the last 4 years, recent trends show that retail investors are currently much more positive than institutional investors."
See:
14. Retail squeeze. "There appears [to] be a heavy retail component to what's been driving the price action over the past two months."
15. Options activity. "The trend in CBOE equity call volume has surged 30%+ over the past two months. Speculation is back in style."
See:
16. Tech flows. Tech has seen strong inflows over the past 8 weeks.
17. Equity fund flows. "US equity funds and ETFs saw $1.71bn outflows this week."
18. Equity allocation. BofA private client equity allocation is above average at 61%.
19. HF long exposure. "Despite equity indices rallying since early June, we’ve now observed five consecutive weeks where HFs have been net sellers of N. American longs in net terms."
20. HF sector exposure. "HF long exposure (as a % total N. Am long exposure) to Energy, Materials, and Utilities is tracking near lows over the past decade."
21. HF sector short covering. Since the beginning of June, "Autos was the most covered industry across all sectors by a fairly wide margin."
22. Short flow. "While Most Short, High Retail Sentiment, and Cyclical sectors such as Energy, Consumer Disc, Industrials, and Financials have seen sizable covers recently, Defensives and TMT stocks have seen a notable increase in shorts."
23. Cyclicals vs. Defensives. "Global cyclicals are overextended relative to global defensive."
24. Market breadth. "Breadth has materially improved, but mega-cap Growth has continued to lead. However, sentiment may be nearing an extreme. The combined market cap of eight tech-related stocks has surpassed the combined market cap of Energy, Materials, Industrials, Financials, and Real Estate."
25. Q2 earnings update (I). With 18% of the S&P 500 reported, the blended earnings and growth rates are -9% and -0.3%, respectively.
26. Q2 earnings update (II). The blended net profit margin is 11.1%..."If 11.1% is the actual net profit margin for the quarter, it will mark the sixth straight quarter in which the net profit margin for the index has declined year-over-year."
27. Realized vs. implied moves. "The average realized move this earnings season has been +/-4.6% vs a +/-3.6% implied move 5 days prior to earnings...It’s rare to see the average realized move outperform the implied move by this much, or at all."
28. Retracement. "The S&P 500 has crossed above the 76.4% retracement of its peak-to-trough decline. After all declines of 20%+ (bear markets) since 1929, the retracement proved the start of a new uptrend. No retests of former lows. Gains post the 76% retrace were stronger than average."
29. Coppock Curve. The "slope has turned up in mid April, and the indicator itself has now turned positive. With the exception of 2001, this has consistently signaled the start of a new bull market."
30. Analysts capitulation. And finally, most Wall Street firms have revised up their SPX price targets for 2023...“It’s literally almost a strategist short squeeze."
Have a great weekend!
Daily Chartbook #242
Excellent. Thanks!
Excellent work thank you 🙏