Discover more from Daily Chartbook
Daily Chartbook #68
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. O&G underinvestment. Higher energy capex is badly needed.
2. Natural gas prices drop. "Mild Weather + Supply Growth = U.S. Natural Gas Heading For Longest Losing Streak Since 1991".
3. Extreme financial conditions. The one-year change in Goldman's US Financial Conditions Index is at GFC levels.
4. Recession indicators. "Both our extremely broad Economic Composite Index and the best recession indicator available (LEI 6-Mo rate of change) are now firmly into recession territory".
5. NBER update. "Update on the data the NBER's business cycle dating committee tracks. All higher on latest readings and 4 out 6 at post-Covid high".
6. Q3 GDP. BofA's Q3 GDP tracking is up to 2.5%.
7. US imports normalizing or… "Are imports returning to pre-pandemic levels or will they keep falling?"
8. Stretched USD. "Dollar overvaluation measures appear increasingly stretched".
9. 2-year yield vs. S&P dividend yield. The yield on US 2-year Treasuries is higher than the S&P 500 dividend yield by the widest margin since 2007.
10. Treasuries selloff streak. "The selloff puts Treasuries on course for a 12-week streak of losses, the longest since 1984, when then-Fed Chairman Paul Volcker was carrying out a series of rapid rate hikes".
11. Global flows. Cumulative global sector fund flows
12. Investor flows (I). Investors continue favoring US government debt, and large- and mid-cap equity funds.
13. Investor flows (II). "Leveraged and inverse ETFs have attracted $25 billion of fund flows this year, on pace for a record".
14. Investor flows (III). Flows into all equity funds appear to be rolling over.
15. Investor flows (IV). "BULLISH: Retail investors take shelter in cash AFTER stock market rout".
16. Wealthy investors (I). "BofA private client flows into bonds have accelerated".
17. Wealthy investors (II). BofA's private client equity holdings as a percentage of AUM remain above average.
18. Expensive protection. "SPX upside calls have never been more expensive, talking in volatility terms".
19. Small traders. “Small traders are as bearish as they can get. The only time we were higher was in 2002. Historically when the average joe panics, the forward returns were above average and the bottom was near”.
20. No momentum. Stocks haven't seen back-to-back weekly gains since August, and the last time prior to that was in March.
21. Negative yielding debt. "Stock of negatively yielding debt has collapsed to $1.4tn".
22. LEI vs. earnings. "The 6-Mo ROC of the LEI index suggests that earnings will weaken further before the market makes a final bottom".
23. Returns after midterms. "Going back to 1950, the S&P 500 Index has always had a positive return during the year following midterm elections" with an average return of 15.1%.
24. Sector P/Es. How sector forward P/E ratios stack up against their 5- and 10-year averages.
25. Earnings season (I). "While only 200 companies reported [through yesterday], the early results make clear misses are not tolerated."
26. Earnings season (II). Through roughly 20% of earnings season, "earnings beats are being rewarded but the base level of expectations is that ~4-5% beat is required to prevent a negative response".
27. Earnings season (III). With 20% of the S&P 500 reported, 72% have beaten EPS estimates (top) and 70% have beaten revenue estimates (bottom).
28. Earnings outlook. And finally, EPS estimates for 2022 and 2023 have declined to $223 and $239, respectively.
Have a great weekend!