Daily Chartbook #248

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

1. Home prices. "Zillow expects U.S. home prices to rise 6.3% between June 2023 and June 2024."

2. Rent prices. Zillow's rent index suggests a sharp decline ahead in the rent component of core CPI.

3. Student loans. "There are a total of 45 million people with student loans, and the average monthly student loan payment is around $200. So resuming student loan payments in October will subtract roughly $9 billion from consumer spending every month, or roughly $100 billion a year."

4. Excess savings. "We now estimate that roughly USD900bn remains of a total of more than USD2.3trn, with many lower income households likely having depleted any cushion."

5. Household savings. "29% of consumers do not have any savings."

6. PE dry powder. "Private equities have a record amount of dry powder that can be deployed to offset some impact from tighter credit."

7. US vs. Global data. "The US Citi Economic Surprise Index has massively outperformed economic data globally."

8. Business surveys. The Dallas Fed Manufacturing Index improved by more than expected to the highest level in 4 months at -20. The Chicago Business Barometer rose by less than expected for its 11th straight contractionary reading.

9. SLOOS. "U.S. banks during q2 saw tighter standards, weaker demand for commercial and industrial loans, and CRE loans…reported tighter standards, weaker demand for residential real estate loans vs prior quarter."

10. Credit spreads. "Corporate bonds now yield only 0.12% above the Fed Funds rate. The lowest level since 2007, preceding the Global Financial Crisis. Every time credit spreads were at historically suppressed levels, a hard-landing scenario followed."

11. Copper stocks. "Copper remains on track for a near stock depletion by end of year."

12. Copper positioning. "Speculators aggressively added to their copper length [last] week."

13. Oil positioning. "Total oil net managed money jumped to 512mb [last] week to a 3-month high, and now stands at percentile 29."

14. CTAs vs. gold. CTAs are long gold.

15. Treasury positioning. "Our latest Treasury Client Survey indicates investor positioning remains near its longest levels of the last 5-10 years."

16. Stocks vs. bonds. "Investors [are] more optimistic about stocks relative to bonds than at any point since SentimenTrader models began comparing them 24 years ago."

17. SPX correlation vs. VIX. "The implied intra-stock correlation is now very low relative to VIX. This implies that the market sees very little risk in the macro-outlook."

18. Risk appetite. Sentiment indicators across asset classes point to higher risk appetite.

19. Sentiment indicator. Equities positioning remains stretched.

20. Retail buying. "Retail investors have reduced their share purchases."

21. De-grossing. "July is tracking to be one of the largest active de-grossing months for hedge funds in recent years (92nd percentile on a 10-year lookback), driven by short covers and to a lesser extent long sales (~3 to 1)."

22. Short covering. "On a trailing 2-month basis, the cumulative notional short covering in June and July...is on track to be the largest since 2016 (in the 97th percentile vs. the past 10 years)."

23. HFs vs. Staples. "US Consumer Staples was heavily net sold on the week driven by long-and-short sales. [Last] week’s notional net selling was the largest since Dec ’21 and ranks in the 97th percentile versus the past five years."

24. HFs vs. TMT. "Info Tech and Comm Svcs were by far the most net bought US sectors on the Prime book [last] week. [Last] week’s net buying in USTMT...was the largest since Dec’22...TMT stocks collectively now make up 34.2% of total Net exposure (vs. 24.6% at the start of 2023), near the highest levels since Sep ’21."

25. CTAs vs. equities. "Aggregate CTA equities positioning climbed again [last] week and is now at its highest level since February 2020."

26. Equity positioning. "Our measure of aggregate equity positioning saw a pullback [last] week (72nd percentile), driven by a drop in discretionary investor positioning (71st percentile), while systematic strategies positioning rose (76th percentile)."

27. Sector positioning. Investors are most overweight Communication Services (90th percentile), Staples (88th), and Tech (81st). They are most underweight Utilities (31st), Materials (32nd), and Healthcare (32nd).

28. Cross-asset positioning. "Elevated positioning in equities has pulled away from that in other asset classes...positioning in commodities like oil and copper remains subdued, in the dollar it is short, and in bonds it remains very short."

29. Sector breadth. "Healthcare, Energy, Industrials and Utilities...are showing the best breadth ...meanwhile... Communication Services, Tech and Consumer Discretionary have seen the most significant equal weight versus cap weight underperformance."

30. Earnings revisions. And finally, earnings "revisions breadth has pushed higher once again over the past several days."

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