Daily Chartbook #300

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1. Price drops. "The share of for-sale homes with a price drop at its highest level in nearly a year."

2. Homebuyer demand. "Redfin’s Homebuyer Demand Index—which measures tour requests and other early-stage demand signals—dropped to its lowest level in nearly a year."

3. Jobless claims. Initial jobless claims were unchanged from last week at 209k, slightly missing expectations of 210k. Continuing claims rose more than expected, climbing for the 3rd straight week.

4. CPI (I). Headline inflation rose more than expected in September (0.4% vs. 0.3% est, 0.6% prev) driven by housing costs, which accounted for over half the increase in overall prices. Core CPI was in line with expectations, rising 0.3% MoM (0.3% prev).

5. CPI (II). Similar story on a YoY basis with headline inflation rising more than expected (3.7% vs. 3.6% est, 3.7% prev) while core CPI was in line (4.1%, 4.3% prev).

6. CPI (III). Month-over-month change for select CPI categories.

7. CPI (IV). Supercore prices saw their biggest MoM increase (0.61%) of the year but edged down to 3.9% YoY (4% prev).

8. CPI (V). "The really good news is that the headline and core CPI inflation rates excluding shelter rose just 2.0% each during September (chart). These two measures of inflation have already scored bullseyes on the Fed's 2.0% target!"

9. Real wages. "After a record 25 consecutive months of negative real wage growth, wages have now outpaced inflation on a YoY basis for 5 straight months."

10. Credit card delinquencies. "The increase in credit card debt is not worrying so far. But the rise in new delinquencies is a point of concern."

11. Lag effect. "According to a recent Chicago Fed study, about one-third of the effects on GDP and 60% of the effects on total hours worked from past rate hikes have yet to be felt."

12. Sector maturity wall. "The sectors that have higher refinancing needs in 2024 are Leisure, Retail, and Capital Goods in investment grade. And Transportation, Real Estate, and Autos in high yield."

13. MMFs vs. bank deposits. "Despite continued inflows into MMFs, US bank deposits did not contract over the past four months; if anything they are slightly up by around $50bn since the end of May."

14. Oil supply/demand. "IEA says it sees early signs of ‘demand destruction’, however, it still forecasts global oil demand growing 2.3m b/d in 2023, followed by a 0.9m b/d in 2024. The market remains in deficit, but will turn into a surplus in the first half of next year."

15. Crude output vs. rigs. "Interestingly, record output is being accomplished with far fewer oil rigs as drillers get increasingly efficient at getting the most out of wells."

16. US commercial petroleum inventories. "Inventories rose by 6.3 MMbbl last week, driven by a *large* 10.2 MMbbl crude build. This was the largest weekly crude build since early February and reversed ~5 weeks of cumulative draws. Gasoline stocks fell 1.3 MMbbl, distillate down 1.8 MMbbl."

See:

17. Strategic Petroleum Reserves. "For the second time in three weeks, the Biden administration drained the SPR (admittedly a tiny 6k barrels)."

18. UST longs. "Speculators have been liquidating hawkish options wagers targeting additional hikes. The rise in long positions in latest JPMorgan survey of Treasury clients was the largest in 2 months, to 28% from 22% last week."

See:

19. AAII sentiment. "Net % of investors with a bullish sentiment fell into the 60th percentile. Declines were seen for both Bearish (-5.1%) and Neutral (-4.8%) sentiment amongst investors."

20. NAAIM. Active managers increased exposure over the past week. NAAIM Exposure Index up to 45.8 from 36.2.

21. Advisor sentiment. The Investor Intelligence Bull/Bear Ratio rebounded to 2.13 from 1.77 over the past week.

22. HFs vs. US equities. "HF community is still very short this market and as tape moves higher they have a lot of single stocks to cover."

23. Buybacks. "Corporates will become very busy at the end of the year, and November/December are the best two-months of the year for executions, ~$5B VWAP per day to close out 2024."

24. Lagging small caps. "Why do lagging Small Caps matter? If they underperformed Large Caps by > 10% through early October, we were twice as likely to head into recession within the next year."

25. Seasonality. "Historical seasonality suggests the beginning of the best part for world equity returns start on October 12th. On average, two-thirds of equity returns occur in the last 10 weeks of the year."

26. Multiples vs. rates. "Since the 1970s, rising interest rates have always caused equity P/E to contract. Not this time around. Equity multiples for SPY have been expanding for more than a year while rates have been lifted aggressively by the Fed."

27. Earnings day moves. "The average stock is implying an earnings-day-move of 5.8%, above its long term average."

28. Earnings revisions trend. "U.S. earnings revisions trend tracked by Citi has fallen back into negative territory."

29. Sector earnings revisions. "Analysts are revising earnings estimates for Energy, Consumer Discretionary, Information Technology and Communication Services up the most, while forecasts are being cut in all other sectors."

30. Q3 earnings. And finally, “Deutsche Bank sees the S&P 500 earnings per share hitting a record high in Q3.”

Thanks for reading!