Daily Chartbook #252
Daily Chartbook #252
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Home prices. "The median home sale price was $380,250, up 3.2% from a year earlier. That’s the biggest increase since November."
2. Mortgage payments. "The typical U.S. homebuyer’s monthly mortgage payment was $2,605 during the four weeks ending July 30, up 19% from a year earlier and down just $32 from early July’s all-time high."
3. Supply chain pressures. "The Global Supply Chain Pressure Index (GSCPI) in July rose to -0.90 from a revised value of -1.14 in June."
4. M2 vs. GDP. "The US M2 to nominal GDP ratio... is now 4.3% above the pre-Covid trend, down from 7.2% in 1Q23 and a peak of 27% above trend reached in 2Q20...When this ratio declines below trend is when monetary tightening will really start to bite."
5. Interest payments vs. profits. "US nonfinancial corporates’ net interest payments as a percentage of profits after tax have declined from 19.2% in 1Q22 to 14% in 1Q23, the lowest level since 2Q66."
6. US public debt. The CBO predicts US public debt outstanding will reach $52 trillion by 2033. That implies a $5.2 billion rise in debt every day for the next 10 years.
7. Inflation surprise. "Global inflation surprises have dropped to the lowest level since 2020."
8. S&P Global PMIs. "Services still holding in expansion (>50), but slowing. Manufacturing down a tick to near 3 yr. lows and contracting (<50)."
9. Nonfarm payrolls (I). "187k jobs were added according to the establishment survey, with -49k in revisions the prior two months. Slowly trending down to near pre-pandemic pace."
10. Nonfarm payrolls (II). "Nonfarm payrolls were revised down for the sixth consecutive month. Year-to-date, with revisions, cumulative payroll gains are 13% lower than first reported."
11. Unemployment rate. "The US Unemployment Rate moved down to 3.5% in July from 3.6% in June. The 3.4% reading in April was a 54-year low."
12. Average hourly earnings. "Not much of a slowdown in wage growth. Average hourly earnings rose 0.4%, advancing 4.9% annualized over the last three months. This is a bit firmer than the pace seen over the last year."
13. Household survey. "Household survey: Number employed +268K, 2nd month in a row it has outperformed Payrolls (Establishment Survey)."
14. Gas prices. “At $3.82/gallon, the national average price for gas has only been higher on 6% of all days since 2005. Gas prices have spiked to 2023 highs at a time of year when they're usually headed lower.”
15. Gold flows. Gold funds have seen outflows for 10 consecutive weeks. The longest streak since November 2022.
16. USD recovery. "It’s hard for me to be too optimistic on this quarter’s performance out of the major indexes if the US Dollar Index is above the lows from the first half of the year."
17. Money market funds. "$21 Billion worth of MMF were added this week, while outflows from stocks and bonds. This should continue in August. MMF funds ATH of $8.1 Trillion."
18. Retail flows (I). "Having missed some of the current rally, retail investors are getting more aggressive (1st panel) and buying the dip (2nd panel)."
19. Retail flows (II). Buying has been focused in ETFs.
20. Retail flows (III). They are also "rapidly buying the iShares 20+Year Treasury Bond ETF (TLT)."
21. Tech flows. Inflows to tech funds have accelerated, totaling close to $6 billion over the past 4 weeks.
22. Stock correlations. "Average pairwise stock correlations dropped to below-average levels in July, a sign that investor fear is starting to vanish as stocks continue to march higher. Correlations typically spike during selloffs and drop when investors are bullish on equities."
23. Energy discount. Energy stocks are trading at historical relative lows vs. Discretionary stocks despite the lowest US crude oil inventories since November 1985.
24. Sector-level earnings (I). Revisions breadth by sector.
25. Sector-level earnings (II). Quarterly consensus EPS growth projections by sector.
26. EPS estimates. “After the major earnings reports last night, another twist, this time a jolt higher in EPS estimates.”
27. Earnings indicator. Morgan Stanley's Non-PMI Leading Earnings Indicator implies a ~25% cut to earnings.
28. Earnings reaction. "In the current quarter for earnings, US stocks have moved +/-4.6%, which is the highest in the last ten years."
29. Top 10 vs. bottom 490. "If this is a new bull market—and it looks that way—the market should be broadening and, fortunately, it is."
30. Seasonality. And finally, “seasonality is 'climate, not weather' and guarantees nothing. That said, anyone who is surprised if the market corrects in the months ahead is NOT a student of market history.”
Have a great weekend!
Thanks again. And by the way, chart number four strikes me as being one of the simplest and clearest representations of what unusual monetary and fiscal times these last three years have been!