Daily Chartbook #111

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

Administrative note: As a reminder, Daily Chartbook will be off next week and back Tuesday, January 3.

1. New home sales (I). Sales of new homes jumped unexpectedly (again), increasing 5.8% in November (vs. -4.7% expected).

2. New home sales (II). However… "New home sales adjusted for home builder cancellation rates. Much different story second half of 2022 as buyers started canceling in droves".

3. Personal income & spending (I). "Americans' spending rose less than expected while income rose slightly more than expected (with real spending disappointingly unchanged MoM)".

4. Personal income & spending (II). "YoY Spending growth is at its slowest since Feb 2021".

5. Personal savings (I). "Personal savings rate ticked up in November to 2.4% but still remains incredibly low relative to history".

6. Personal savings (II). "Americans, in the aggregate, are still sitting on a lot of savings built up during the pandemic, which could help support spending going forward".

7. Wages & salaries. "Govt worker wages are back to pre-covid levels; private workers are still about 1.5% higher than pre-covid".

8. PCE (I). Month-to-month change in headline and core PCE with topline contributions.

9. PCE (II). "November PCE inflation +5.5% y/y vs. +5.5% est. & +6.1% in prior month (rev up from +6%) … core PCE +4.7% vs. +4.6% est. & +5% prior".

10. PCE (III). "There's some degree of progress in goods inflation, which is encouraging, but services continue to rise, up 0.4% m/m. This is not what the FOMC wants to see ahead of their next meeting".

11. Consumer sentiment. "The final headline UMich rose from November and the flash print, with expectations leading the way".

12. Inflation expectations (I). "The 1-year inflation expectation dropped from 4.6% flash to 4.4% final (from 4.9% in November)... the lowest since June 2021".

13. Inflation expectations (II). However, "inflation uncertainty remains extremely high".

14. Buying conditions. "Buying conditions improved very marginally but home-buying attitudes remain near multi-decade record lows".

15. Durable goods. "US Durable Goods Orders tumbled 2.1% MoM in preliminary November data (considerably worse than the 1.0% drop expected)….The biggest MoM drop since the COVID lockdowns and slowest YoY growth since Feb 2021".

16. Container throughput. "On a YoY basis, RWI/ISL index points to a weakening of global trade growth (volume) in 4Q".

17. S&P WACC. "One year ago, the weighted average cost of capital for S&P 500 firms equaled 4.1%, close to the lowest level in history. However, during the past 12 months the cost of capital for US firms surged by the largest amount in 40 years".

18. Margin debt. "Margin debt balances fell to $644 billion in November, the lowest level since July 2020".

19. Credit fund flows. "Deteriorating flows trend to corporate bond funds".

20. Equity outflows (I). Passive equity funds just experienced their biggest outflows on record.

21. Equity outflows (II). As did value funds.

22. Most shorted. "Heavily shorted stock basket tracked by Goldman Sachs is having its worst month since April 2022 and March 2020".

23. Asset manager positioning. "Asset managers' US equity positioning has moved into much more neutral territory over past weeks".

24. Equal- vs. cap-weighted. "It's unusual to see the equal-weighted S&P 500 index outperform the cap-weighted version for an extended period like it is now. The only similar analog is the Dotcom bust".

25. Volatility vs. strength. "Going back 5+ decades, few years have seen as many 1% daily swings as we have had in 2022 & none have seen fewer days with new highs > new lows. 2008 & 1974 were the most similar".

26. Final week. "S&P 500 performance during the last week of the year hasn't historically been as strong as you might think".

27. Santa Claus rally returns. And finally, “if the S&P 500 finishes higher during this year’s Santa Claus Rally, it would mark the seventh consecutive period of positive returns”.

Have a great weekend, happy holidays, and an even better New Year!