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Daily Chartbook #309
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 rates. "According to Bankrate.com‘s data, US 30-Year fixed-rate mortgage reached 8.04%, the highest rate since June 2000."
2. Effective mortgage rates. "Everyone locked in 3% mortgage rates, except Millennials."
3. Mortgage demand. Mortgage demand continues to deteriorate.
4. New home sales (I). New home sales jumped by 12.3% MoM in September to 759k (vs. 680k expected), the highest since February 2022. New home sales are up 34% on an annual basis.
5. New home sales (II). The median sales price was $418,800 in September which is down from $477,700 a year ago.
6. Consumer interest payments. "Total interest payments by US consumers have surged of late as a share of wages and salaries."
7. National Financial Conditions Index. The NFCI "was unchanged at –0.39 in the week ending October 20, suggesting steady financial conditions."
8. Proxy fed funds rate. "The Fed has quantified what their forward guidance and balance sheet policy mean for the fed funds rate, and their estimates show that the proxy fed funds rate is 7% rather than the official 5.5%."
9. Q3 GDP (I). "Gross domestic product is projected to have grown at an annual rate of 4.5% last quarter, more than double the pace in the prior period" and the fastest in nearly 2 years.
10. Q3 GDP (II). The Atlanta Fed's GDPNow model is even more bullish, estimating a 5.4% growth rate for Q3.
11. Gas prices vs. wages. "Gasoline prices relative to US average hourly earnings are not disproportionately high compared to history, suggesting that oil demand will likely hold up if the broader macro economy does."
12. Oil inventories vs. timespreads. "Commercial crude stocks have declined by 132mn barrels in 3Q23 from December 2019 and continue to draw this quarter, which in turn has been a key factor pushing the Brent crude oil market into steepening backwardation."
13. OPEC exports. "Oil exports from the OPEC countries that announced a voluntary production cut in April have increased by c.0.8 mb/d over the past month, and are c.1.2 mb/d higher than August levels, despite unchanged production quotas."
14. US commercial petroleum inventories. "Inventories declined by only 0.5 MMbbl last week, a far cry from the uber-bullish 9+ MMbbl draw reported by API yesterday."
15. HY corporate spreads. "Spreads are still not extreme by any measure; but they’re rising, and the trend seems to be clearly upward as the 200-day moving average has now been breached."
16. UST issuance. "The bulk of the Treasury supply increase is ahead of us."
17. TLT flows. "Another $1.1b into $TLT yesterday, second biggest inflow of year, that brings Oct flows to $3.2b and YTD to $20b (crushing it's all time [annual] record w 3mo to spare)."
18. Investor flows. "On rolling one-month basis, large- and mid-cap equity ETFs have accounted for nearly 34% of inflows ... gov’t bond ETFs in higher demand with nearly 39% share of inflows."
19. ETF positioning. "Despite a 9% S&P 500 correction, we have yet to see excessive pessimism reflected by ETF positioning. Inverse ETF volume is currently at 42% of total speculative ETF volume. Major bottoms form around 60%..."
20. HFs vs Financials. Hedge funds have been mostly buying EU Financials and selling US Financials in 2023, though the trend is showing signs of reversing in October.
21. HFs vs. EU. "From the start of October, we have observed a sharp rotation from Cyclicals into Defensives, arguably as a reaction to the macroeconomic/geopolitical environment."
22. SPX vs. no record high. "The benchmark has posted an average annual gain of 10% once it’s gone an entire calendar year without notching an all-time high."
23. Nasdaq vs. S&P. "As much as the Nasdaq has trounced the S&P so far this year (+25.5 pct vs +10.6 pct YTD), it’s actually playing some catch up, having lagged by almost one standard deviation over the last 3 years."
24. Stock-specific risk. "Stock specific risk is elevated for the overall market."
25. Correlations (I). "Technology diffusion could drive a negative correlation between growth and inflation…"
26. Correlations (II). "...which could lead to an increase in the stock/bond correlation, according to Morgan Stanley."
27. Large- vs. small-cap. "Small-cap Industrials and Energy are actually up and doing better than their large-cap peers YTD."
28. Global earnings revisions. "The Global Earnings Revision Ratio moderated from 0.78 to 0.74 in October. By region, the Ratio is highest in Japan (1.19) and Europe (0.76), and lowest in the US (0.65) and Asia Pac ex-Japan (0.66)."
29. SPX EPS. "We still expect that S&P 500 earnings per share rose to a record high during the quarter."
30. Forward EPS vs. P/E. And finally, “forward EPS (orange) now starting to do some actual lifting when it comes to market’s YTD return … no longer all multiple expansion as forward P/E (blue) has come down markedly.”
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