Daily Chartbook #251

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

1. New listings. "Seller listing activity remains muted as newly listed homes continued to decline in July compared to the previous year, by 20.8%."

2. Active listings. "The number of homes actively for sale decreased by 6.4% compared to last year."

3. Homeowner vacancy. "The U.S. homeowner vacancy rate–the share of homes that are vacant and for sale–fell in the second quarter to 0.7%, the lowest level in Commerce Department records reaching back to **1956**."

4. Shipping costs. "The Drewry World Container Index composite increased 11.8% to $1,761 for a 40-foot container, the fourth straight advance and biggest week-on-week percentage gain since June 2021."

5. Auto loans. "The average interest rate on 48-month new car loans in the US has moved up to 7.59%. That's the highest we've seen since 2007."

6. Fed vs. Federal debt. "It’s important to note that the Fed’s ownership of US federal debt has recently plunged to 2014 levels. Inevitably, this trend needs to be reversed."

7. Card spending. "Total card spending per HH was up 0.5% y/y in the week ending Jul 29, according to BAC aggregated credit and debit card data."

8. Challenger layoffs. Employers cut 23.7k jobs in July, the fewest since August 2022. Cuts fell 8% from a year ago for the first YoY decline in over a year.

9. Jobless claims. "Initial jobless claims for the last week of July rose 6,000 to 227,000. The 4 week average decreased -5,500 to 228,250. Continuing claims, with a one week lag, rose 21,000 to 1.7 million."

10. Unit labor costs & productivity. "Unit labor costs moderated in Q2 '23 to 1.6% annualized rate from 4.2% in Q1 was below the 2.5% consensus. Further good news was the increase in nonfarm productivity which rose to 3.7% [most since Q3 2020] from -2.1% in Q1. Consensus was 2.2%."

11. ISM Services PMI. The headline index "slipped, dropping 1.2 to 52.7 (vs 53.1 consensus).  Employment dropped 2.4 to 50.7 just barely in expansionary territory.  Prices paid rose 2.7 to 56.8.  New orders dropped -0.5 to 55.0."

12. Factory orders. "US Factory Orders jumped 2.3% MoM in June (as expected), the biggest MoM jump since January 2021. However, despite the bounce, on a year-over-year basis, orders remain down 0.2%."

13 Treasury selloff. "The US Treasury selloff has been driven by long-dated notes, not those most sensitive to Fed policy. This suggests two things: traders expect inflation to stay higher for longer and they question whether the Fed is truly going to raise rates high enough to achieve 2% inflation."

14. Bond term premium (I). "The rising bond term premium indicates investors are starting to demand greater compensation to bear heightening risks from inflation and an increase in issuance."

15. Bond term premium (II). "Both the ACM and Kim-Wright measures of 10y term premium show it in deeply negative territory, suggesting it may take some time for markets to reprice for a significant term premium increase."

16. SPX vs. US10Y. "SPX correlation to 10y yields is now at its most negative level in 18 years."

17. Expected ERP. "The higher the expected ERP, the more attractive it is to own equities, and the lower it is (and especially if it is negative) the more attractive it is to own bonds instead of equities."

See: ,

18. HY bonds. "Twenty percent of the high yield index trades with yields higher than 10%."

19. Client flows. "BofA's private clients have been selling TIPS and financials, and buying Japanese stocks, HY and IG over the past four weeks."

20. Active managers. The NAAIM Equity Exposure index dropped sharply over the past week, falling to 78.5 from 101.8.

21. CTAs vs. equities. "We estimated CTAs are long $58bn in US equities (98th%ile on a 5y lookback)."

22. AAII sentiment. "Fewest bears in 2+ years."

See:

23. Bullish retail. Last week's "delta order imbalance was the most bullish in our historical data since 2020."

24. Retail flows. "Retail investors flipped to selling single stocks again in July, following strong buying in June."

25. Equal-weight vs. cap-weight. "The only other time the equal weight S&P was doing as badly as right now was in May 2020 and the subsequent rotation back into equal weight was powerful."

26. Forward EPS growth. "Given current pricing of risk levels, we could see a sharp re-rating of Forward Earnings expectation to > 30%."

27. EPS estimates. "A bit of twist developing with S&P 500 next 12 month EPS estimates hooking lower."

28. Earnings reactions (I). "Stocks reporting strong results are not being rewarded with a higher share price as much as usual, while stocks reporting weaker results are getting hit even harder than usual...Tech and Communication Services sectors that are to blame for the weakness."

29. Earnings reactions (II). "High Short interest stocks were up on earnings day this quarter, while low short interest stocks declined."

30. First 1% drop reaction. And finally, “why US equity investors should not fear the first 1% drop following more than two months without one? Because the S&P 500 has gained 14.8% on avg one year later since 1980.”

Thanks for reading!