Daily Chartbook #262
Daily Chartbook #262
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. China real estate. "Shocking. Positively shocking...Wildcard for ‘soft landing’. .. Risk of China ‘credit event’ already spooking global markets but we would expect China event quickly elicits big (international) policy response."
2. Default rates. "Trailing 12-month default rates are creeping upward."
3. M&A. "Large-scale M&A returned in the second quarter with 10 announced deals larger than $10 billion, above recent averages."
4. Online sales. "E-commerce retail sales continue to soar as year/year pace picked up to +10.3% in July ... right in line with longer-term average."
5. CPI vs. spending. "Getting inflation back down to 2% with spending so high relative to income is near impossible – and the drop in spending-to-income looks to have bottomed for the moment."
6. Excess savings drained. "Excess savings for US households when adjusting for inflation are now fully exhausted from a 2021 high of $2.1tr."
7. Excess household liquidity. "Currently our team estimate excess household liquidity adjusted for inflation at ~$1.4tr to fully drain by May’24 assuming a steady depletion rate."
8. Fed vs. market. "Even as the Fed's message is that rates will need to stay higher for longer, the bond market expects 100 basis points for easing next year."
See:
9. Bitcoin drop. The sharp drop in Bitcoin Thursday evening led to a big spike in long liquidations.
10. CTAs vs. copper. CTA positioning in copper has flipped from long to short.
11. US bond flows. US bonds attracted $1.7bn in the week ending Aug 16 for the 33rd straight week of inflows.
12. Relative valuations. "The valuation of equities relative to government bonds is still a long way from being as stretched as it was before the dot com bubble burst .. there is ample scope for an AI-fuelled bubble in the stock market to reflate before ultimately bursting."
13. US10Y vs. SPX (I). "This trend is not sustainable."
14. US10Y vs. SPX (II). "The stock-bond ratio is mean reverting, and we are around growth levels where it could soon revert to the mean (or overshoot to the downside)."
15. US10Y vs. SPX sectors. "If 10-year Treasury yields breakout to new highs, communication services, consumer staples, and technology could see outsized headwinds as they have been the most inversely correlated sectors to yields over the past year."
16. Put appetite. "In Thursday's session - total put option volume on US exchanges reached levels not seen since March as demand for downside protection picks up."
17. Cash ETFs. "Pretty aggressive influx to 'cash' ETFs yesterday."
18. Money market fund flows. "Cash inflows of $925 billion YTD already surpasses record inflows in 2020."
19. Asset class flows. Money-market funds have dominated YTD flows across asset classes.
20. Private clients (I). BofA's private clients are selling growth, financials, and tech and buying Japan, IG, and munis.
21. Private clients (II). Allocations to equity have ticked down recently but remain above average.
22. Equity fund flows. "Outflows from stocks also accelerated this past week (to-$6.29bn from -$1.38bn)."
23. Traditional energy vs. Green energy. "For all the talk of green energy, since the end of 2020, the market is showing a strong preference for traditional energy. Make of it what you will."
24. Yul Byrnner. "The 'Yul Brynner' of our self-proclaimed 'Magnificent Seven' is Microsoft ...if ring leader can't maintain new highs, equity and credit narrative could flip from 'buy-the-dip' in H1 to 'sell-the-rip' in H2."
25. Sector EPS forecasts. Year-end EPS forecasts by sector.
26. Pre-Covid highs. "48% of all global stocks currently trading below their pre-COVID 2020 high."
27. Bull markets vs. sell-offs. "It's normal for stocks to go through quick swoons like these."
28. Market breadth. "As of Wednesday, just 62% of all Russell 3000 stocks were above their closing prices on October 14 (even though the index itself is up ~23% since then)."
29. Breadth extremes. "Last 13 trading days of July just two days of negative breadth. First 13 trading days of August just two days of positive breadth."
30. Reset. And finally, “we are back at January 2022 levels for S&P500 price, P/E and EPS (forward).”
Have a great weekend!
Excellent material. Thanks
Great selection as usual. Thanks!