Daily Chartbook #41

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

1. Record renewables. A record 24% of US power generation came from renewables in the first half of 2022.

2. Record natural gas consumption. The US will also consume more natural gas than ever in 2022, according to EIA's forecast.

3. US petroleum inventory levels. Stocks for total petroleum, crude, gasoline, and distillate for the week ending September 9.

4. Oil price forecast. Goldman Sachs sees prices for Brent reaching $130 a barrel in 2023.

5. Global tightening. Global financial conditions are tightening.

6. Global profits outlook. Fund managers expect global profits to fall over the next 12 months and "are more negative about the profit outlook than at any time in the 25-year history of the survey."

7. Recession odds (I). Global fund managers still believe we are headed into a recession.

8. Recession odds (II). From Goldman (on the US): "For now, we see recession odds of 30% over the next 12 months".

9. EPS vs. economic growth. Again, from Goldman: “If a recession unfolds in 2023, S&P 500 EPS would fall by 11% (vs. growth of 3%).

10. Small biz (I). "63% of small businesses have paused hiring, largely in real estate, autos, healthcare, retail, finance, and manufacturing".

11. Small biz (II). The "percentage of small businesses with positive earnings trends continues to plunge and is firmly recessionary".

12. CPI surprise. "In the last 18 months CPI inflation has surprised to the upside 10 times and to the downside only twice".

13. Inflation forecast. Goldman has core inflation ending "2022 at 6.1% and 2023 at 2.9%"

14. PPI divergence. For the second month in a row in August, producer prices for final demand in the US fell (-0.1%, in-line) while core prices increased (+0.4% vs. +0.3% expected).

15. Gradual disinflation. Producer prices have rolled over year-over-year.

16. PPI breakdown (I). Month-over-month change of topline and sub-component contributors.

17. PPI breakdown (II). Year-over-year change of topline contributors.

18. PPI breakdown (III). Year-over-year change of top 5 sub-component contributors.

19. Personal Consumption Expenditures price forecast. BofA expects core PCE (due at the end of the month) to increase 0.4% in August.

20. Supply-constrained categories. The impact on core PCE inflation from supply-constrained categories is diminishing.

21. It's different this time. Yield inversions typically precede the end of Fed tightening cycles.

22. US2Y. "2-year US Treasury yields are now at their highest level since 2007 as speculative investors positioning themselves for more pain to come."

23. S&P sell-off. Yesterday was the worst day for the S&P "since June 2020 and the ninth-worst 1-day loss in the past 10 years."

24. Big tech sell-off. And every single stock in the Nasdaq 100 closed red for the first time since March 2020.

25. BTFD. But retail investors were active and bought the dip to the tune of $2 billion.

26. Short covering Info Tech. Hedge funds have been covering short positions against Information Technology. According to Goldman, they have been net buyers in 12 out of the last 14 days.

27. Zombies. "Tighter monetary policy has had an adverse effect on zombie companies which have lagged broader market by >10% YTD".

28. Energy stocks. From Goldman: "With confidence in durability of commodity prices prices, we see potential for Energy market-cap weighting within S&P 500 to further increase".

29. Rates & earnings. And finally, from Kantro: "The longer rates stay high, the longer we’ll see downside momentum to earnings revisions. If earnings estimates for 2023 ($244) don’t change, there is only a 2% gain into year end from EPS from current NTM estimates. Anything beyond that must come from P/E expansion".