Daily Chartbook #142

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

1. Homebuilder sentiment. "Builder confidence in the market for newly built single-family homes in February rose seven points to 42...the strongest reading since September of last year".

2. Stagflation. "Among participants, 83% expect below-trend growth and above-trend inflation in the next 12 months (versus 85% last month)".

3. Fed's plan. "Without recession, the disinflation from the 2021 slowdown ends sometime soon, setting up for a re acceleration later this year. Not to 8%, but high enough for the Fed to rue its choice of slowing rate hikes when it did".

4. NFP forecast. "US jobs market remains hot, but should slow in 2H".

5. Survey fatigue. "Declining response rates on surveys conducted by US government agencies could have significant implications for financial markets".

6. Retail sales (I). "Headline retail sales soared 3.0% MoM in January. That is the biggest jump since March 2021, lifting the YoY rise in retail sales up to +6.4%".

7. Retail sales (II). Under the hood.

8. Retail sales (III). "Core retail sales growth also beat on a MoM basis but the YoY slipped to just +4.4% - lowest since March 2022".

9. Retail sales (IV). "7.2% gain in restaurant retail sales in January was strongest since March 2021 … before pandemic, we’ve never seen that kind of strength".

10. Retail sales (V). All categories increased in January.

11. Retail sales (VI). "Real retail sales have gone nowhere over the past two years".

12. Empire State. "February Empire Manufacturing Index improved to -5.8 vs. -18 est. & -32.9 in prior month … new orders better but still contracting; workweek worsened; prices paid moved higher … notably, employment dipped to lowest since pandemic began … 6-month outlook improved".

13. Industrial production (I). "US Industrial Production increased 0.8% over the last year, the slowest growth rate since February 2021".

14. Industrial production (II). "Notable within January industrial production data … -9.9% m/m drop in utilities was largest on record".

15. Manufacturing production. "Manufacturing output actually rose 1.0% MoM (its best print since Feb 2022)".

16. Capacity utilization. "Capacity Utilization slid to 78.3% - the lowest since Oct 2021".

17. Q1 GDP. "The Atlanta Fed's GDPNow is forecasting +2.4% real GDP growth for Q1 2023". Previous 2.2%.

18. IEA estimates. "IEA sees oil demand rising by 2 million barrels per day (bpd) in 2023, with China making up 900,000 bpd. That is up 100,000 bpd from last month's forecast to a record 101.9 million bpd".

19. EIA update. US commercial petroluem inventory levels 

20. CTAs & gold. "Prices would need to rally north of $1900/oz to catalyze the next algorithmic buying program...little selling flow is expected from trend followers in the yellow metal until prices break below the $1800/oz mark".

21. BTC death cross. First Bitcoin weekly death cross ever.

22. Equity-bond correlation falling. "The equity-bond correlation became increasingly positive over the course of 2022, driven by high inflation and a forceful monetary policy response".

23. Treasury yields vs. SPX earnings yield. "Six-month Treasury bills currently yield a hair below 5%, the highest since 2007. Meanwhile, the S&P 500 earnings yield clocks in at about 5.08%. The gap between them is the slimmest advantage that stocks have held since 2001".

24. 0DTE volume. "Over the past month, nearly 1 out of every 2 Options traded on SPX, SPY and QQQ are 0 days til expiration".

25. Most crowded. "FMS investors think the most crowded trade is long China equities".

26. Rule of 20. "'Rule of 20' (combining S&P 500 P/E with CPI) has move marginally higher of late and suggests market remains overvalued".

27. Earnings progression. "Based on the historical progression of estimates, I expect earnings could fall 5% to 10% this year. As you can see here, except for 2020, profit-growth trends are as weak now as they have been in years".

28. No landing scenario. "The bottom line is that high inflation and associated Fed hawkishness continue to be a downside risk to credit markets and equity markets".

29. Later, deeper, longer. And finally, “where I disagree with the current equity market sentiment... monetary tightening takes time to run through the economy. My models still say later, deeper and longer recession”.

Thanks for reading!