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Daily Chartbook #265
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
1. Homebuyer migration. "More than one-quarter (25.8%) of homebuyers are looking to move to a different part of the country, a record-high share and up from 23.7% a year ago."
2. Mortgage demand. The MBA's "index of home-purchase applications fell 5% to 142, the lowest level since 1995."
3. New home sales. Sales of new homes jumped 4.4% MoM in July to +31.5% YoY.
4. Household interest expense. "Household interest expense has risen to the highest level ever recorded."
5. US government debt (I). "Interest rates are rising, the annual debt servicing cost of the US government is close to $1 trillion, and the net interest expense as a share of total government revenues is near all-time high levels."
6. US government debt (II). "We have gone from being one of the 5 lowest Debt-to-GDP countries to a top 5 highest in 23 years."
7. US government debt (III). "To sustain the current government spending deluge, we believe it is inevitable that the Fed and other monetary authorities reassume their fundamental role as the primary financiers of government debt.”
8. Manufacturing construction. "Almost the entire U.S. manufacturing boom is taking place in computer, electronic, electrical equipment."
9. National Financial Conditions Index. The NFCI "ticked down to –0.40 in the week ending August 18, suggesting financial conditions continued to loosen."
10. Flash PMIs. S&P Global Manufacturing and Services PMIs both missed estimates, falling to 47 (from 49, vs. 49.3 est) and 51 (from 52.3, vs. 52.2 est) in August, respectively. The former has contracted in 7 out of the last 8 months while the latter is at its weakest since June.
11. Crude inventories. "US inventories dwindled to the lowest since December 2022."
12. SPX vs. gold vs. oil. "By these measures, oil is the cheapest of the 3 assets based on historical ratios. Gold is in the middle, and US large cap stocks are the most expensive."
13. MOVE vs. SPX. "It’s not necessarily level of yields that matters for stocks; it’s volatility: looking at daily changes in MOVE Index (measuring bond volatility) by decile, largest swings to upside consistent with largest average daily decline for S&P 500 (going back to 1990)."
14. CTAs vs. asset classes. "CTA positioning across the futures complex suggests that investors are already well positioned for higher yields."
15. 0DTE. "8 of the top 10 highest notional volume days for SPX 0DTEs have occurred in the last month alone...Further, SPX 0DTEs have set records (100th %ile as of 18-Aug-23) for the highest monthly average notional volume ($630bn), contract volume (1.4mn contracts), and market share (49% of total SPX option volume)."
16. SPX vs. fear. "S&P 500 is where it was two years ago. During that time, the $SPX is up 20% when we've had either Fear or Strength and has lost 20% when, like now, there has been neither Fear nor Strength."
17. Growth vs. Value. "Valuation extremes continue to persist between Value vs. Growth."
18. HF sector tilts. "Hedge funds carry their highest tilt to financials since early 2013."
19. Sector breadth. "91.3% of Energy sector stocks are above their 50-DMAS. 30.4% of S&P 500 stocks are above their 50-DMAs. Less than 10% of Real Estate and Utilities stocks are above their 50-DMAs."
20. SPX breadth. "The number of components outperforming the index is near a decade low, hovering around the 2nd percentile."
21. Nasdaq breadth. "Ahead of NVDA, Nasdaq breadth just hit an all time low."
22. Tech valuations. "Global tech valuations are the most stretched since the Dot Com Bubble."
23. P/E vs. ERP vs. US10Y. "Stocks are actually now more expensive on an Equity Risk Premium basis even though the P/E and S&P 500 are down 6% from July's highs."
24. Negative ERPs. "Tech and Discretionary sectors are currently trading at negative equity risk premiums meaning the forward earnings yield on these sectors is below the yield on the 10-year Treasury."
25. Discretionary vs. wages. "A bearish consumer outlook appears priced into the S&P 500 discretionary sector, which ex AMZN and TSLA is trading well below prepandemic average valuations. But rising real wages bode well for multiples, and could help offset the impact of higher interest rates."
26. Discretionary vs. consumer confidence. "While consumer discretionary has outperformed staples quite nicely over the past year, this is highly contingent on consumer confidence remaining more buoyant."
27. SPX earnings revisions. "S&P 500 revisions breadth (2024 estimates) is back in positive territory at +5% (more EPS upgrades than downgrades)."
28. Global EPS revisions (I). "Globally, upward earnings revisions continue to outpace downgrades."
29. Global EPS revisions (II). "Global Earnings Revision Ratio Highest in 18 months."
30. Seasonality. And finally, "sideways trading ahead?"
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