Daily Chartbook #291

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

1. Balance of trade. "Advance international trade deficit in goods was $84.3B in August 2023, down 7.3% from July 2023 (seasonally adjusted)."

2. Retail & wholesale inventories. "US business inventories climbing in MoM growth. Retail up most since the start of the year, with wholesale practically flat."

3. GDI vs. GDP. "GDI drops relative to GDP about six quarters ahead of recession, give or take a few quarters. The current drop puts the timing of recession's start from Q4 to mid-2024."

4. Personal income & spending. "August personal income (blue) +0.4% m/m vs. +0.4% est. & +0.2% in prior month … personal spending (orange) +0.4% vs. +0.5% est. & +0.9% in prior month."

5. Personal savings rate. The personal savings rate fell to 3.9% in August from 4.1%

6. Excess savings. "The GDP revisions raised our estimate of excess savings through 2Q 2023 to $1.1tn, because of large downward revisions to the saving rate pre-Covid."

7. Card spending. "Real-time data on card spending has taken another leg lower and is significantly weaker than prior levels."

8. PCE prices (I). Month-over-month, headline PCE rose by the most since January (+0.4% vs. +0.5% est, 0.2% prev) but core PCE rose by the least since November 2020 (+0.1% vs. +0.2% est, 0.2% prev). Headline and core are up 3.5% and 3.9%, respectively.

9. PCE prices (II). "Notably, supercore has not cooled as much as core lately."

10. Corporate buffer. "Many companies locked in exceptionally low rates that were available immediately after the COVID shock."

11. Unrealized losses. "U.S. banks were sitting on nearly $600 bn of unrealized losses on their securities portfolio in 2023 Q2. This amounts to almost 25% of the banking system’s capital base."

12. Bank weakness. "The renewed weakness in U.S. bank stocks is a reminder that the problems that plagued the banking system earlier this year have not gone away."

13. Oil gains. Oil prices saw their biggest quarterly gain since Q1 2022.

14. Oil positioning. Brent and WTI "longs have risen to +37 and +27 respectively, with all components bullish."

15. Oil supply shortage. "The supply shortage is somewhat artificial because there is abundant spare capacity."

16. Global real yields. "The global real yield of the largest EM and DM countries has increased by the most over one year since 1969, rising by over six percentage points."

17. US30Y. "Yields on 30-year Treasuries are on track for their largest quarterly jump since 2009."

18. Long-run equilibrium. "The recent selloff in long-end US rates...has mainly owed to investors reassessing the long-run equilibrium level of rates, due in large part to the Fed’s continual reinforcement of its 'higher-for-longer' message."

19. US fixed income flows. First weekly outflow in 39 weeks.

20. T-Bills vs. earnings yield. "The yield on three-month Treasury bills now exceeds the earnings yield (the inverse of the price/earnings ratio) that can be received from the S&P 500, for the first time since the dot-com bubble burst at the beginning of this century."

21. US10Y vs. earnings yield. "The 10Y yield is approaching the point at which, historically, it begins to exhibit a stronger relationship with SPX earnings yield."

22. EM capital flows. "In the past 20 years, it has never happened that the rest of EM got capital inflows when China had outflows. But that is what's happening now."

23. Private client flows. "Private clients buying bank loan, value and growth ETFs, selling TIPS, precious metals, low-volatility & financials ETFs past 4 weeks."

24. Equity fund flows. "Flows to stocks turned positive this past week with a +$7.61bn inflow, after recording a year-low -$18.96bn outflow the previous week."

25. SPX vs. economic surprise. "S&P 500 performance correlation to economic surprise index turned negative in July and remains in 'good news is bad' territory."

26. Quality vs. Growth. "This year, earnings variability — buying those companies whose earnings are most consistent, often labelled 'quality' — has surged, while the growth factor, buying stocks whose earnings are growing, has stagnated."

27. Q3 earnings guidance. "116 S&P 500 companies have issued EPS guidance for the third quarter. Of these companies, 74 have issued negative EPS guidance and 42 have issued positive EPS guidance."

28. Q3 EPS & sales growth. S&P 500 earnings are expected to decline by -0.1% YoY in Q3 on annual revenue growth of +1.6%.

29. SPX flush? (I) " SPY made lower intraday lows for 9 days in a row, but this ended yesterday…Super small sample size, as only 3 other times (since 1993) did we see streaks like this. 6 mo later? up 18.0%. 12 mo later? up 30.9%."

30. SPX flush? (II). And finally, “the most benchmarked index in the world [had] set lower lows for almost two straight weeks [as of 9/27]. Almost unprecedented, especially in the last 40 years. Since then, double-digit gains over the next six months. Not so much in the decades prior.”

Have a great weekend!