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Daily Chartbook #304
Catch up on the day in 30 charts
Welcome back to Daily Chartbook: the day’s best charts & insights, curated.
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1. Mortgage demand. Mortgage demand remains historically week. The MBA Purchase Index dropped to 129.8 from 137.5 over the past week, the lowest since February 1995.
2. Mortgage rates. According to Mortgage News Daily, rates on 30-year fixed mortgages have hit 8%, the highest since 2000.
3. Building permits & housing starts (I). "Permits beat expectations, but tumbled 4.4% MoM (-5.7% MoM exp)...Starts missed expectations, rising 'only' 7.0% MoM (+7.8% exp)."
4. Building permits & housing starts (II). "Under the hood, multi-family rental permits plunged by the most since Nov 2022 while single-family permits rose for the 9th straight month. Multi-family unit starts rose by the most since Aug 2022."
5. Distressed CRE. "The value of distressed US commercial real estate neared $80 billion in the third quarter, its highest level in a decade."
6. North American freight. "Latest Cass Freight data still shows recession for the 'stuff' economy."
7. Student loan payments. "Paused student loan borrowers only expect modest consumption declines from August spending when payments resume."
8. Household net worth. "Inflation-adjusted median net worth jumped 37% to $192,900 from 2019 to 2022...That marked the largest three-year increase in data back to 1989, and it was more than double the next-largest one on record."
9. National Financial Conditions Index. The NFCI "ticked down to –0.39 in the week ending October 13, suggesting financial conditions loosened."
10. No recession. "For the first time in over a year, the Wall Street consensus no longer expects a recession over the next 12 months." As an aside, Bloomberg economists’ forecast for a US recession was 100% almost exactly 1 year ago.
11. Tail risks. Persistent inflation and tight monetary policy remain the largest tail risks, according to FMS investors.
12. CTA estimates vs. WTI Crude. "Our CTA data doesn't show this community being material buyers."
13. US commercial petroleum inventories. "Inventories drew by a staggering 11.9 MMbbl last week, the largest headline liquids draw since late-2021."
14. Cushing inventory. Crude stocks at Cushing fell by 758k to 21 million barrels in the week ending October 13. This is the lowest level since 2014.
15. SPY vs. TLT. "The outperformance of Bloomberg’s index of 20+-year Treasury bonds by the S&P 500 has continued almost uninterrupted since the pandemic summer of 2020."
16. US 10-year. Yields on the benchmark 10-year Treasury closed above 4.9% for the first time since 2007.
17. Investor advisor sentiment. The Bull/Bear Ratio improved to 2.32 from 2.13 over the past week.
18. Investor flows. "Shift away from equities continues given large- & mid-cap ETFs accounted for 35% of inflows over past month (compared to nearly 48% last week); government bond funds picked up slack and represented nearly 31% of inflows vs. nearly 26% last week."
19. Systematic positioning. "Systematics equity positioning has come down quickly and is at the lowest levels of the year."
20. CTAs vs. US equities. "In the US, CTAs are short -$30bn of equities after buying $16bn last week."
21. CTA estimates vs. SPX. "CTAs are now buyers of SPX in every scenario over the next week."
22. Returns from extremes. "The US call/put ratio and the AAII are already at levels that suggest positive near-term asymmetry for equities."
23. Fed vs. SPX. "There have been six instances since 1970 in which the Fed raised rates by over 100 bps for a period of a year or more, then paused for at least 3 mos. The S&P 500 was up all 6 times during the 3 mos, an avg 8.2%."
24. Seasonality (I). "4Q Year 3 seasonality is all about a bullish December."
25. Seasonality (II). "November-April is best 6-month period of the year."
26. Sector correlations. "Sector correlations have risen as Treasury yields have broken out, but not to a level that suggests higher rates have damaged the equity market’s bullish tone."
27. CIOs vs. CEOs. "53% of FMS investors want corporates to improve balance sheets (up 9ppt MoM to highest level since May’23) over increasing capital spending (25%) or returning cash to shareholders (15%)."
28. Operating leverage (I). "Operating leverage is expected to improve from -5% in 2Q to -1% in 3Q ... [and] from -1% in 2023 to 6% in 2024."
29. Operating leverage (II). "Comm. Services and Discretionary have the highest operating leverage expectations" for Q3.
30. Equity risk premium. And finally, “the S&P 500 equity risk premium is nearing zero for the first time in over two decades.”
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