Daily Chartbook #165

Welcome back to Daily Chartbook: the day’s best charts & insights, curated.

1. Existing home sales (I). "Existing home sales jumped in February by +14.5% vs. +5% est. & -0.7% in prior month (best month since July 2020) … monthly supply at 2.6; median selling price -0.2% year/year to $363k."

2. Existing home sales (II). "Mortgage payments for a new purchaser of a median-priced existing single-family home was equal to 51% of disposable income in February, down from the recent peak of 55% in October but significantly above the 30-to-35% during the pre-Covid era."

3. Global GDP. "2% real global GDP growth forecasted this year."

4. Supply chain easing. "The Fed's Global Supply Chain Pressure Index fell to lowest level since August 2019."

5. Financial conditions. "The US True Financial Conditions Index is close to a 40-year low".

6. Financial stress. "FWIW, the real-world signs of financial stress are still muted. So, are the financial stress indicators wrong and will have to play catchup? Or are they right and people are over-reacting?"

7. M&A activity. "The number of U.S. M&A deals decreased by 23% from January to February, while total spending on U.S. M&A deals increased by 136% during this time."

8. Systemic credit event. "US shadow banking still seen as the biggest source of a systemic credit event."

9. Tail risks. "Systemic credit event' overtakes 'inflation stays high' as biggest tail risk."

10. Recession fear. "A systemic credit event has replaced stubborn inflation as the key risk to markets for increasingly pessimistic investors."

11. Stagflation. "Expectations for stagflation have remained above 80% for 10 months in a row… FMS investors have never held such strong conviction about the economic outlook."

12. Fed funds rate. "Hawkish shift in expectations of 'peak' Fed this month; investors see an additional 75bp hike this cycle."

13. Yield curve. Investors expect a steeper yield curve in the next 12 months.

14. Stocks vs. bond yields. "Stocks and bond yields moving together again (briefly) ... rolling 20-day correlation between S&P 500 (blue) and 10 U.S. Treasury yield (orange) has jumped into positive territory."

15. Bitcoin rally. "After slumping 64% last year, Bitcoin has recently beaten major asset classes amid the banking turmoil that shook the finance world."

16. Investor flows. "Last week saw huge inflows to both large-cap equity and U.S. Treasury ETFs (>$10B each) ... over past month, government bond ETFs have made up 73% of inflows, while large-cap ETFs have made up only 5.2% of inflows."

17. Energy flows. "Energy inflows were the largest in our data history since 2008."

18. Risk appetite. "The GS 'Risk appetite indicator' crashes down to 2022 bear market levels."

19. Risky vs. safe. Investors are pouring into safe assets funds over risky ones.

20. Risks perception. "Last Bofa FMS shows a level of pessimism that usually coincide with market bottom."

21. FMS positioning (I). Fund managers are most overweight emerging markets equities and cash, and most underweight US equities.

22. FMS positioning (II). Relative to history, fund managers are most long bonds, staples, and cash.

23. Consolidated equity positioning. "Positioning has become more bearish."

24. Bearish investors. "Investors now the most bearish they have been since the start of '23."

25. Hedge funds. "Trend-following hedge funds…just had their worst 5-day stretch this century."

26. Cash flow usage. "55% of FMS investors want corporates to improve balance sheets over increasing capital spending (21%) or returning cash to shareholders (17%)."

27. Nasdaq vs. SPX. "NASDAQ’s recent 9.5 percentage point outperformance over the last 50 trading days versus the S&P 500 is highly unusual from a statistical perspective."

28. SPX vs. bond market volatility. And finally, "which one gives first?"

Thanks for reading!