Daily Chartbook #33

Welcome back to Daily Chartbook: macro market charts, data, and insights pulled from various sources around the Internet by a solo retail investor.

Programming note: Daily Chartbook will be off Monday, September 5.

1. Gas prices (I). "Front-month gasoline futures are now below where they were on Election Day 2021".

2. Gas prices (II). The year-to-date change in gas prices is now below the average year’s change since 2005.

3. US inventories. Total oil and crude stocks remain well below their 5-year ranges.

4. Car inflation. "Key conclusion: pricing continues trending up, discounts are mostly stable on low levels".

5. Labor market pressure. The unemployment rate is expected to rise in 2023.

6. Challenger cuts. US companies announced plans to cut 20,485 jobs in August, the lowest reading in six months. This chart shows "+30.3% y/y vs. +36.3% in prior month; third consecutive increase, with tech sector leading all industries (5,081 cuts in August); so far this year, tech companies have announced 14,408 cuts".

7. Headline CPI forecasts. Potential pathways for headline CPI, according to JPMorgan.

8. Peak PCE inflation. According to Goldman Sachs, peak core PCE inflation is behind us. They are forecasting 4.2% in December 2022, 2.6% in December 2023, and 2.3% in December 2024.

9. Nonfarm productivity (I). "Slight improvement in 2Q22 revision for unit labor costs (+10.2% q/q vs. +10.8% initial) and productivity (-4.1% q/q vs. -4.6% initial)".

10. Nonfarm productivity (II). Nonfarm business sector labor productivity decreased by 4.1% in Q2 and fell 2.4% YoY which is the lowest in the data series going back to 1948.

11. Global manufacturing (I). From Michael Kantro: "I’m forecasting that this will be the month where more than 50% of global manufacturing PMIs will contract (below 50). As of last month it was 42%. That’s equally weighted, not GDP weighted. GDP weighted we are already there".

12. Global manufacturing (II). "Global manufacturing new orders, share of countries with PMI above 50".

13. S&P Global US Manufacturing. PMI was revised to 51.5 from 51.3, but the reading is still the “lowest since July 2020 amid further loss of new orders”.

14. ISM Manufacturing (I). US manufacturing expanded at the same pace as last month, registering 52.8% on the purchasing managers’ index

15. ISM Manufacturing (II). New orders, production, and employment.

16. ISM Manufacturing (III). Supplier deliveries and inventories.

17. ISM Manufacturing (IV). Customers’ inventories, prices, and backlog of orders.

18. ISM Manufacturing (V). What respondents are saying.

19. “Wake me up when September ends”. Here's the average performance of benchmarks in September (2001-2021).

20. Rule of 20. “The rule of 20 (P/E + CPI) still suggests that U.S.equities are overvalued.”

21. S&P 500 EPS up & P/E down. "S&P 500’s forward 12m EPS (blue) rebounded in August while forward 12m P/E (orange) plunged, largely continuing this year’s pattern".

22. Stocks & bonds (I). "The correlation between stocks and bonds over the last 2 years is the highest we've seen since 1995-1997".

23. Stocks & bonds (II). "The last 8 times the S&P 500 was down in a calendar year, Bonds finished the year up, cushioning the blow." This time around has proven very different.

24. Bond rout. "US Bonds are down 11.6% over the last 2 years, their worst 2-year return in history."

25. Inverse fund flows. On Tuesday, investors added a net $154.4 million to the inverse S&P 500 ETF $SH. It was "the largest one-day increase since April 2020".

26. The Jackson Hole effect. This year’s decline of 5.5% (from Thursday’s close before JH) “ranks as the second most negative since at least 1994, falling short of just 1998 when the S&P 500 declined by 5.8%”.

27. Big swings. And finally, the S&P 500 this year has seen the highest number of large (>1%) intraday swings since 2008.