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Daily Chartbook #247
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Starter home. "A first-time homebuyer must earn roughly $64,500 per year to afford the typical U.S. 'starter' home, up 13% ($7,200) from a year ago."
2. Household debt. "It's not just US corporates whom are immune to higher interest rates. US household debt service is lower than before the pandemic despite rates rocketing higher!"
3. Early hikers. "Early hikers remain on track to mostly avoid recessions despite (on average) raising policy rates by 900bp. GDP growth remains positive in almost all countries...and unemployment rates have mostly trended downward, including since the start of 2023."
4. Economic surprise. "Citigroup Inc.’s Economic Surprise Index is now its highest since March 2021."
5. State Coincident Indexes. "Nine states are near zero growth, including systematically important California...June was the most dramatic markdown of state-level economic growth this year."
6. GDP recovery. "World of Overshoots: pandemics, wars, nationalism, political polarization, heavy ($28tn) policy stimulus, lowest rates in 5000 years to fastest nominal GDP recovery since WW2."
7. PCE prices (I). "Core PCE Deflator - slowed dramatically from +4.6% to +4.1% YoY in Jue (slightly cooler than the 4.2% exp ). Headline PCE fell back to +3.00% (from +3.8%) for the first time since March 2021."
8. PCE prices (II). "PCE shows progress on all three buckets of core prices the Fed has called out."
9. Personal income/spending. "Americans' incomes rose 0.3% MoM (weaker than the expected 0.5% rise), while spending outpaced incomes (rising 0.5% MoM, better than the 0.1% expected)."
10. Spending categories. "Jolly but cautious consumers in June. More spending on goods. More discretion & (some) pullback on services."
11. Employment Cost Index. "Headline ECI compensation fell 0.3ppt to 4.5% y/y, its slowest pace since Q1 2022, though still well above the 3% pre-pandemic pace. Private-sector wage growth fell a notable 0.5ppt to 4.6% y/y – its lowest since Q3 2021 and 1.1ppt below its Q2 2022 peak of 5.7%."
12. Consumer sentiment. "Consumer sentiment rose for the second straight month, soaring 11% above June and reaching its most favorable reading since October 2021."
13. Q3 GDP. The Atlanta Fed's GDPNow early estimate for Q3 GDP growth clocked in at 3.5%, implying the strongest growth since Q4 2021.
14. Oil positioning. Commercial traders have "dramatically reduced their net short positions which has historically been a bullish indicator" for oil prices.
15. TIPS flows. Treasury Inflation-Protected Securities saw their first inflow ($0.5bn) since August 2022.
16. Bond flows. "Global bonds saw their 18th consecutive week of inflows, reaching a total of $11bn for the week to July 26th…the US once again took in the bulk of flows at $7.2bn."
17. Cumulative flows. "Last week, global equities witnessed a positive flow of $13.8bn. DM equities received inflows of $10.2bn, with US equities alone attracting $9.9bn."
18. Foreign investors vs. Japanese equities. "Despite the ongoing debate around when the BoJ may tweak its YCC policy, foreign investor buying has steadily been rising in Japanese equities."
19. Tech fund flows. "Tech funds saw outflows over the past week."
20. Materials fund flows. Materials saw their largest inflow of the last 25 weeks including $1.9bn over the last 2 weeks.
21. Client flows. "Last week clients were big net sellers of US equities ($6.96B, biggest weekly outflows since Nov. 2020) after buying equities the prior three weeks...Clients sold stocks in seven of 11 sectors, led by Tech and Communication Services, with record weekly outflows from both sectors."
22. Buybacks. "Corp. client buybacks slowed despite typically picking up at this point of results season and have been tracking below seasonal trends since May."
23. New highs streak. "Trend in net new highs has been higher 34 days in a row (and counting). That's the longest stretch since mid-2021."
24. Market breadth improvement. "73% of stocks within the S&P 500 are trading above their 200-dma as of July 27. This compares to only 48% at the end of 2022. In addition, the composition of breadth leadership has turned increasingly bullish."
25. SMID recovery. "Even with recent outperformance from Small and Mid-cap stocks as well as A/D Line high for mid-caps, recovery is quite terrible. Small-mid caps have only made it back to most former valuation troughs since 2000."
26. Tech vs. market. "A look at overall P/S of tech vs the market. The whole tech sector not as high as tech bubble on this metric at moment."
27. Margin pressures. "We think consensus continues to underestimate negative operating leverage and its drag on earnings growth, especially for SPX ex-Tech and into 2024."
28. Earnings revisions. "Big week for S&P 500 earnings revisions. Analysts raised next 12 month EPS estimates everyday this week. Most of the growth being penciled into Q2 2024."
29. Q2 earnings (I). "Despite [an] 80% beat rate, the SPX blended Q2 EPS growth rate has taken a tick lower vs June 30"
30. Q2 earnings (II). And finally, companies with >50% of sales generated inside the US have seen earnings and revenue growth while those with >50% of sales outside the US have seen sharp declines.
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