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Daily Chartbook #74
Catch up on the day in 29 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. Declining rents (I). "We estimate that the national median rent fell by 0.7 percent month-over-month in October. This is the largest monthly decline in the full history of our index, which starts in January 2017".
2. Declining rents (II). "Asking rents down sequentially two months in a row after seasonal adjustment".
3. Broad weakness. "Confidence, housing, and retail data are all looking weak relative to their 1-year averages".
4. Resilient labor market. "Labor demand is slowing despite low and steady layoffs".
5. Priorities. "As prices rise people are spending more on what they need, and less on what they desire".
6. Pricing plans. "Corporate intentions to raise prices have peaked".
7. Inflation relief. "Some early signs of inflationary relief in the pipeline as we see the Goldman Sachs Analyst Index show price pressures are falling this month".
8. Less tight. Financial conditions have eased slightly.
9. Chicago PMI. "Another drop for Chicago PMI in October to 45.2 vs. 47 est. & 45.7 prior; prices paid & inventories rose at faster pace; new orders fall at faster pace; employment and production fell at slower pace … 5 components rose vs. prior month".
10. Dallas Fed. General business activity in October for manufacturing in Texas dropped to -19.4 from -17.2. Employment moved higher but new orders, shipments, inventories, and workweek all moved lower (and either remain in or fell into contraction).
11. Q1 2023 GDP. Goldman’s "1Q23 US real GDP growth rate consensus has turned negative".
12. DeFANG'd. Megacap tech vs. the S&P 500 (Thurs-Fri last week).
13. Monthly flows. "Inflows were large this past week, but November is when they get "serious" about deploying money into markets. According to GS we should expect around $2.5B per day".
14. Sector fund flows. "Financials and tech have been seeing inflows in recent weeks".
15. No chasing. Hedge funds have not chased the latest rally.
16. Equity positioning (I). Goldman Sachs' sentiment and positioning indicator has moved into positive territory for the first time this year after 34 consecutive negative readings (longest such streak in history).
17. Equity positioning (II). "Equity positioning is up from the most recent lows, but we are far from 'meaningfully long'."
18. Equity positioning (III). CTA "equity positioning starting to increase, but well below mid-Aug high".
19. Average cash. Cash holdings as a % of AUM for BofA's private clients is right around its long-term average.
20. Global earnings downgrades. "Global earnings are revised downward. Red line is revision rate. Green is average rate. Purple bars is 3 months change in MSCI World".
21. Growth downgrades. In the US, "most of the recent earnings downgrades have been in growth stocks".
22. EPS beat rewards by sector. Healthcare stocks are being rewarded most on earnings beats.
23. Margins under pressure (I). After last week's earnings results, JPMorgan's "estimate for 3Q22 S&P operating margins dipped to 12% down from 12.4% a week prior and 13.3% from a year ago".
24. Margins under pressure (II). Unfilled orders and supplier delivery data point to further margin compression ahead.
25. Gold streak. "Gold is poised for its longest losing streak since 1968".
26. Larve vs. small. Large-cap performance relative to small-caps is at a 1-year low.
27. Large vs. small (II). “The S&P 600 PE10 ratio (price vs trailing 10yr average earnings) is sitting about 10% below the average of the past 25 years, and is trading at a discount of -10% vs the S&P 100 (which compares to an long-term average premium of +5%)”.
28. Don't miss. From BofA: Earnings "misses are getting punished, underperforming the S&P 500 by 667bps the next day, the largest in history".
29. Seasonality. And finally, "November historically has been a strong month for stocks. In fact, the past 10 years it has been the best for stocks and in a midterm year it has been the second best (only October was better)".
Thanks for reading!
MONDAY BONUS: Cheat sheet. Global markets week in review.