Daily Chartbook #287

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

1. Global trade. "Global trade fell at the fastest annual pace since the first Covid-19 restrictions of 2020, reflecting slowing global demand as interest rates rise."

2. US vs. EU credit spreads. "Spreads are currently pricing that Europe will have a recession with many defaults, but in the US, everything is fine."

3. Food prices. History suggests that once US food prices rise, they generally don't come down.

4. Chicago Fed National Activity Index. The "Index dipped into negative territory last month to -0.16."

5. Dallas Fed Manufacturing. Business activity ticked down to -18.1 from -17.2.

6. Consumer spending. "Consumer spending appears to be slowing after a strong back-to-school shopping season."

7. Student loans. "Nearly half of all outstanding federal student loan debt is being held by only 10% of borrowers who are holding debt of $80,000 or more."

8. Excess savings. Morgan Stanley "estimates that lower-income households have fully exhausted their excess savings, while middle- and higher-income households are less willing to spend their excess savings on discretionary consumption."

9. Oil vs. Energy. "Based on the relationship since 2015, the Energy sector would return +4% if Brent oil prices rise to our 12-month target of $100."

10. Oil vs. industries. "Passenger Airlines, Construction Materials, and Air Freight & Logistics typically lag most of any industry when oil prices rise by 5%+ in a month."

11. Bond positioning. "Positioning in bonds is still very short."

12. Real yields vs. SPX. "The real rate/equity return correlation has fallen further into negative territory, signaling that rate moves are an increasingly important determinant of equity performance from a directional standpoint."

13. Sentiment indicator. Goldman's Sentiment Indicator shows a sharp drop in equity positioning.

14. Equity positioning. Consolidated (56th percentile), Systematic (59th), and Discretionary (53rd) positioning all ticked down last week but remain above neutral.

15. Sector positioning. "Tech (z score 0.30, 67th percentile) is the only sector where positioning still remains overweight, albeit only modestly so."

16. MF vs. HF positioning. Mutual fund and hedge fund positioning relative to S&P 500.

17. Active manager positioning. Active managers are mostly underweight equities.

18. CTA positioning. "CTA length is still quite long: GS estimates that positioning currently sits at +$30bn."

19. Sector fund flows. Tech ($1.3bn) and Energy ($0.8bn) funds saw notable inflows last week while Financials (-$1.4bn) saw their 8th straight week of outflows.

20. Retail caution. "Retail investors are not as keen on buying the dip in the current selloff."

21. HF trading flow (I). "US equities were net sold for a 3rd straight week and saw the largest net selling since Jan ‘22, driven almost entirely by short sales."

22. HF trading flow (II). “8 of 11 sectors were net sold [last] week, led in notional terms by Consumer Discretionary, Financials, Health Care, and Info Tech, while Comm Svcs, Energy, and Staples were the only net bought sectors.”

23. HF leverage. “US Fundamental L/S Net leverage saw the largest week/week decline since Mar’20 as HFs ramped up the pace of shorting.”

24. Insider transactions. "The Insider Transactions Ratio is back in the bearish zone."

25. Dividend changes. "So far this quarter, more companies are decreasing their dividend versus increasing .. underscoring a toned-down outlook from global executives. .. The gap, illustrated below, is the narrowest since Q2 2020."

26. Equal-weight vs. cap-weight. "Breadth under the surface of the market (as measured by equal vs. cap weight performance) looks the strongest in Industrials and Energy...as well as in traditional defensive pockets."

27. SPX pullbacks. "Pullbacks of 5% or more have seen the S&P 500 decline 8-9% off the peak...and typically lasted 5-6 weeks."

28. Q4 rally? "When the S&P 500 is up YTD between 10-20% at the end of September, the fourth quarter has been higher 84% of the time."

29. Directional risk. "Historically, when our signal has reached +/-1stdev, 1mo fwd returns have averaged +4% and-4%, respectively."

30. EPS & sales revisions. And finally, Energy, Tech, and Financials have seen the strongest earnings revisions over the past month.

Thanks for reading!