Daily Chartbook #151

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1. US petroleum inventories (I). "US commercial petroleum inventories FELL for the first time this year, down 3 MMbbl w/w. Crude inventories rose 1.2 MMbbl and distillates were up 0.2 MMbbl, but gasoline fell 0.9 MMbbl & other liquids drew once again by 3.5 MMbbl."

2. US petroleum inventories (II). "From an inventory perspective, 2023 has seen the worst start to any year going back three decades. Even after a 3 MMbbl drop in total petroleum inventories today, total petrol inventories - including SPR - have built by 52 MMbbl YTD."

3. Mortgage demand (I). The rate on the 30-year mortgage hit its highest since November while mortgage applications dropped 5.7%, bringing the purchase index to its lowest since 1995.

4. Mortgage demand (II). Mortgage applications are down 44% year-over-year.

5. Global trade. "Global trade volume contracted in December for third consecutive month, taking 3m change to -3.7% (worst since pandemic and before that, worst since GFC)."

6. AI talk. Companies of all kinds are talking about AI.

7. National Financial Conditions Index. NFCI "was unchanged at –0.41 in the week ending February 24, suggesting steady financial conditions."

8. Backlogs vs. inflation. "More and more companies are expecting backlogs to shrink over the next 6 mos (blue). Historically, this has led moves in y/y CPI 6 mos later."

9. Landing scenarios. "Hard and no landing should be constructive for the USD."

10. Construction spending. "January construction spending -0.1% m/m vs. +0.2% est. & -0.7% prior (rev down from -0.4%) … private residential construction -0.6%, private nonresidential +0.9%, and residential home improvement +0.3%."

11. S&P Global manufacturing PMI. "While the decline across the US manufacturing sector remained solid, the PMI hit a three-month high of 47.3 in February (Jan: 46.9), indicating a softer contraction. Moreover, improvement in supply chains helped reduce input cost inflation."

12. ISM manufacturing PMI. "February ISM Manufacturing ticked up slightly to 47.7 vs. 48 est. & 47.4 in prior month; new orders bounced to 47 while prices paid jumped back into expansion; employment dipped back into contraction."

13. Treasury yields rise (I). "US 2-yr yields surge to post-2007 highs."

14. Treasury yields rise (II). "Treasury 10-year yields topped 4% for the first time since November. The 30-year bond is the only major benchmark whose yield has yet to crack the 4% threshold this year."

15. Deeper inversion. "2-10 spread is at its most inverted since October 1981."

16. Corporate bonds. "Corporate bonds have reversed nearly all gains since the rate cut fantasy evaporated."

17. HYG outflows. "High yield bonds have seen their largest outflow. EVER."

18. SPX correlation. "Low index correlations continue to provide some stability. When stocks are less correlated, the overall risk profile is spread out, leading to lower volatility."

19. Quality tech. "Hedge funds have been busy loading up on big high quality tech stocks this year."

20. Semis buying. "Semis & Semi Equip is by far the most notionally net bought subsector not only within Info Tech but also across all US sectors YTD on the Prime book."

21. AAII bears. "AAII bears are now at levels last seen during 2022 market top."

22. AAII cash. "Since Sep-Oct low, investors have drained cash balances to get long equities."

23. AAII equities. "Allocation to stocks is still very elevated."

24. Leverage. "Overall book Gross leverage at 95th percentile and net leverage at 15th percentile on a 1-year lookback."

25. Corporate insiders. "As US stocks slid last month, only about 450 corporate executives scooped up shares of their own firms and more than four times as many insiders sold. That’s the highest ratio of sellers versus buyers since April 2021."

26. SPX vs. tightening cycles. "Returns are still running in the lower 10%ile of comparative cycles. As the $SPY earnings season draws to a close, we are witnessing compelling evidence of an earnings recession taking shape."

27. Seasonality. "March and April historically are two of the better months for the S&P 500."

28. Earnings quality. And finally, “S&P 500 operating cash flows trail profits by most on record.”

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