Daily Chartbook #128

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

1. Natural gas. "US natural gas falls below $3 for first time since May 2021".

2. IEA outlook. "IEA expects oil market balances to remain in surplus in Q1 before tightening into year-end. The two main drivers will be Russia and China".

3. New home sales (I). "New home sales surprised once again - rising 2.3% MoM (dramatically better than the 4.4% decline expected)".

4. New home sales (II). "Some [616k] houses were bought in 2022, smallest annual total in four years, as aggressive monetary policy tightening by [the Fed]".

5. New home sales (III). "Notably, the median new home price dropped to $442.1K, lowest since August".

6. New home sales (IV). "About 11% of new homes sold were under $300K in December 2022.   This is down from around 80% in 2002.  In general, the under $300K bracket is going away (inflation has pushed prices higher)".

7. US freight. "We are continuing to see signs of improvement in the freight market, albeit from low levels. Volumes are up 11% over 2019 & 2020 comps. (white is 2022, blue & orange are 19/20)".

8. Q4 GDP (I). The economy grew an annualized 2.9% QoQ (prev. 3.2%), above expectations 2.6%. Consumer spending trailed estimates at +2.1%.

9. Q4 GDP (II). "Consumption, Government Spending, Net Exports, and Investment growth all contributed positively to Real GDP in the last quarter of 2022—with inventory growth more than offsetting the decline in housing investment".

10. Q4 GDP (III). Another look at contributions.

11. Q4 GDP (IV). "Real private fixed residential investment just fell below pre-pandemic levels—to the lowest level since Q3 2015".

12. Q4 GDP (V). "The year-over-year growth rate has moved down to 1.0%, the slowest since Q4 2020".

13. Durable goods (I). "New Orders roared 5.6% MoM (more than double the +2.5% expected). That is the biggest jump since July 2020".

14. Durable goods (II). "The big driver of the headline surge was a massive surge in non-defense aircraft orders".

15. Durable goods (III). "Which explains why the Durable Goods Orders Ex-Transports was so weak (down 0.1% MoM) and non-defense, ex-air orders tumbled 0.2% MoM".

16. Jobless claims. "Initial claims declined -6,000 to 186,000, the lowest number since last April. The 4 week average declined -9,250 to 197,500, the lowest since last May. Continuing claims with a one week delay increased 20,000 to 1.675 million, still -43,000 below their recent high in December".

17. Regional manufacturing. "Manufacturing Index from [Kansas City Fed] a bit higher (still contracting) in January, up to -1 vs -8 est & -4 prior month (rev up from -9); new orders sank into contraction, shipments fell (still expanding), employment unchanged (expanding), workweek still contracting".

18. Peak tightness. "Financial conditions don’t hit peak tightness on average until a year after the Fed’s first hike, i.e. another month or two away".

19. Fed vs. market. "The market continues to price in a very fast pivot from a terminal rate of 5% to less than 3%. It’s really hard to imagine that this scenario will play out without a recession (which would prove current earnings estimates as too optimistic)".

20. Fed vs. rate investors. “Rate investors challenging the idea of an early Fed pivot. Soc Gen's position indicator is at a 4-year low”.

21. Inverted curve vs. last hike. "When the curve is inverted, as it is today, stocks typically sell off by about 15-20% over the year following the last Fed rate hike".

22. 1s & 2s. "Every time 1-year Treasuries have yielded more than 2-years by a measurable amount Fed Funds are at a top and go lower soon after. The Treasury market is ringing that bell right now".

23. Dollar scenarios. "Forecast Scenarios for the $DXY US Dollar Index from Morgan Stanley".

24. Bitcoin momentum. "JPM's BTC momentum signal has seen a huge uptick".

25. AAII sentiment. "Latest AAII sentiment reading shows relatively small changes, but we need many more bulls to get sucked in".

26. Active investment managers. "The NAAIM Exposure index is making higher highs for the first time since the market top...Big money is being put to work".

27. Buyback blackouts. "Buyback black out window is ending this Friday...A fresh $3-4bn of passive-aggressive buying every trading day".

28. Q4 earnings. "Over a fifth of the S&P 500 companies have reported this earnings season and so far both earnings and sales have been the most disappointing in some years".

29. Q4 consensus. And finally, “consensus forecasts for Q4 are down from the last month”.

Thanks for reading!