Daily Chartbook #525
Daily Chartbook #525
Catch up on the day in 30 charts
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1. Uneventful week. "Absent a big surprise in PCE, we see no major macro data releases this week that could spook the market. Historically, quiet macro weeks have been the best weeks for stocks (median return +0.61% vs. a typical +0.38%)."
2. SPX catalysts. "S&P options suggest that the next two NFP prints are the main catalysts until the election."
3. Flash PMIs (I). "A further solid expansion of the service sector contrasted with a second successive month of modestly falling output in the manufacturing sector ... [while] average prices charged for goods and services [rose] at the fastest rate since March, representing the first acceleration of selling price inflation for four months."
4. Flash PMIs (II). "The 8.4 point gap between the two series is the largest since at least September 2021."
5. Corporate spreads. "If the US corporate bond market is not worried about an imminent recession, then equity investors can afford to relax a bit when it comes to what last week’s 50 basis point Fed rate cut says about the American economy."
6. FFR vs. spreads vs. SPX. "Last time Fed eased 50bps with credit spreads this low was Jan’81, with stocks at all-time highs was Apr’86."
7. FFR vs. yield curve. "Last two times Fed started with a 50bps rate cut, 3m10y Treasury yield spread was either already in positive territory or in process of uninverting … this time, spread remains deeply negative."
8. US liquidity. "With no historic comparison, the Fed has recently embarked on a new easing cycle in an economy awash with liquidity ... There have never been more excess dollars relative to economic activity than there is today."
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9. Crypto vs. stocks. "A 40-day correlation coefficient for a gauge of the largest 100 digital assets and the S&P 500 Index is at about 0.67, a level exceeded only in the second quarter of 2022 when it topped 0.72."
10. Crypto asset flows. Crypto assets saw a second straight week of inflows totaling $321mn led by flows into Bitcoin products (+$284mn).
11. Gold ETF flows. Cumulative YTD flows into $GLD (the largest gold ETF) have only just recently turned positive.
12. HF trading flows (I). "US equities were net sold for a 6th straight week … HFs rotated into Info Tech, Comm Svcs, and Financials, while all other sectors were net sold led by Consumer Discretionary, Staples, Utilities, Energy, and Materials."
13. HF trading flows (II). Discretionary saw the largest net selling in a year while Staples were net sold for the 6th straight week.
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