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Daily Chartbook #66
Catch up on the day in 28 charts
Welcome back to Daily Chartbook: macro market charts, data, and insights pulled from various sources around the Internet by a solo retail investor.
1. Strategic Petroleum Reserves. Today, President Biden approved the sale of 15 million barrels of oil in December. "If both emergency and congressionally-mandated SPR releases are pulled forward to 4Q22, then the ending crude oil stocks will exit the year at 348 million barrels, the lowest since [February] 1983".
2. Breaking down oil risks. Decomposition of upside and downside risk for oil prices.
3. 30-year mortgage rates. Rates climbed to 6.94%, the highest since 2002.
4. Applications drop. "Mortgage applications for new home purchases decline to a fresh low".
5. New residential construction. Month-to-month, building permits increased to increased 1.4% while housing starts declined by 8.1% in September. Housing completions rose 6.1%.
6. Multi-family permits soar. "The unexpected rise in permits is all due to multi-family units as renter-nation escalates: Single-family permits tumbled 3.1% MoM while multi-family permits soared 8.2% MoM".
7. Supply chain easing. "Supply chain stress essentially back to pre-pandemic level (black line is average); commodities & used car prices helping lead on way down".
8. Too much easing? "Tender rejection rates continue to drop...This is supposed to be peak season for trucking companies, but things are very soft right now".
9. Current risk levels. Concerns over macro risk factors are near peak Great Financial Crisis levels.
10. Q3 GDP. Goldman Sachs has upped its Q3 GDP tracking estimate to 2.4% (QoQ annualized).
11. Q3 GDP and beyond. Meanwhile, the "probability of a decline in real GDP 4 quarters from now sits at a multi-decade high".
12. Resilient economy. "UBS macro index shows rebound in macroeconomic data for September in US showing resilience to fall in contraction".
13. Surprise. "The Citi economic surprise index is at its highest level since early May".
14. Pivot projections. "The majority of fund managers now expect the Fed to quit hiking rates in Q1 of 2023".
15. 10-Year Treasury. The US10Y yield—which today reached its highest levels since June 2008—is "on course for biggest annual rise since at least the early 1950s".
16. Crowded dollar. "Long US dollar remains the most crowded trade in October"
17. Fx volatility. "Currency volatility cost North American companies $34.3 billion in April to June period, which is highest on record going back to 2013".
18. No nonsense. "The only times in the past investors demanded management to be this conservative with their balance sheets was during the prior recessions in 2009 and 2020".
19. Passive indexing savings. "As indexing has grown, investors have benefited substantially by saving on fees and avoiding active underperformance…we observe that the cumulative savings in management fees over the past 26 years is USD 403 billion".
20. AII bulls & bears. Individual investor "sentiment data off its recent extremes but still more bears than bulls".
21. Foreign sellers. Foreign investors have been net sellers of US equities for 8 consecutive months.
22. Slowdown pricing. "Investors are pricing an environment of slowing economic growth".
23. EPS bottom-up consensus revisions. "Select sector and industry group EPS revisions during the last month".
24. Small-caps (I). "Small-caps have outperformed large-caps coming out of recessions 6 out of the last 6 times (all that we have data for), and on avg by 14% from the trough".
25. Small-caps (II). "And they're cheap! In a time when valuations really matter! Relative to S&P 500, the R2000 is trading as low as it did post dot-com bubble".
26. Sector recommendations. From Goldman Sachs.
27. Broad downgrades. Longview Economic's US Broad EPS Revisions Index confirms "a broad breadth of earnings downgrades".
28. Energy vs. market. And finally, on a forward P/E basis, "energy cheapest ever vs market".
Thanks for reading!