Daily Chartbook #18

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

1. OPEC+. On Tuesday, the EIA adjusted its forecast for oil prices down on softening demand due to a global slowdown in economic growth. Today OPEC did the same.

2. Gas prices. The average cost of a gallon of gas is now below $4 and at its lowest since March.

3. US inventory levels. “US crude oil inventories are moving deeper inside the five-year range. However, refined product stocks remain low.”

4. Homeowners and Rates. Here’s where homeowners draw the line on mortgage rates.

5. Active listings. As Bill McBride points out, “inventory is both increasing and still very low”.

6. YoY inventory change. Inventory levels have a long way to go to catch up to pre-pandemic levels.

7. Cancellations. Homebuilders are canceling construction on new homes at a rapid rate.

8. Rent inflation by city. “Overall rents rose by a record average of 14% in May from a year earlier”.

9. Inflation by city. Here's a look at YoY inflation by city.

10. Food prices. Prices for food bought in stores at markets are up 13.1% YoY, “the worst spike since 1979”.

11. Chicago Fed. Chicago Fed’s Survey of Economic Conditions shows economic growth is well below trend.

12. Misery Index. The Misery Index is a little less miserable.

13. Commodity prices. A thought from Credit Suisse.

14. Jobless (I). New claims for unemployment benefits rose by 14,000, below expectations of 15,000.

15. Jobless (II). Continuing Jobless Claims rose to 1,428,000 which was more than the 1,407,000 expected.

16. PPI. Producer prices fell unexpectedly by 0.5% in July. Analysts were predicting a 0.2% increase. PPI is up 9.8% YoY. It was the first monthly decline in over 2 years (April 2020).

17. Core PPI. Producer prices excluding food and energy (orange) increased by less than expected (0.2% vs 0.4%) and are up 7.6% YoY.

18. Construction costs. Construction costs, however, saw a big increase of over 5%. Might have something to do with those homebuilder cancellations above.

19. Early PCE estimates (I). Renaissance Macro estimates “that core PCE will climb 0.3%. Airfares will rise a touch in PCE; they fell nearly 8% in CPI”.

20. Early PCE estimates (II). Here’s BofA: “Feeding the data into our PCE inflation tracker, we estimate that July core PCE increased by 0.2% m/m (0.21% ungrounded). This would result in the y/y rate ticking down from 4.8% to 4.7%”.

21. Inflation forecast (I). BofA is forecasting YoY headline and core CPI at 6.3% and 5.3%, respectively, by the end of the year. “We continue to expect 50bp hikes in September and November, followed by a 25bp hike in December”.

22. Inflation forecast (II). More from BofA: “Core goods inflation continued to decelerate in July, which we expect to continue while core services inflation should remain more persistent”.

23. Shifting to equities. Here’s what retail investors have been buying.

24. Big tech. Before today’s session, the Nasdaq 100 was having its best quarter since Q2 2020 (Covid bounce). It’s coming off its worst quarter since Q4 2008 (Great Financial Crisis)

25. S&P recovery midpoint. The S&P 500 has recovered nearly half of its bear market losses.

26. Forward P/E. “The green line in the chart below (i.e. the cheapest parts of the market) went to levels that you would probably call "cheap", however the red line (most expensive parts of the market) only came down to a higher plateau.”

27. Record announced buybacks. Companies have plans to buy the dip.

28. “Not that bad”. Shares of companies that missed earnings estimates this quarter were…rewarded.

29. NAAIM. The National Association of Active Investment Managers Exposure Index was at 20 (bearish) in June. It’s now at 70 (bullish).

30. Bonds not buying the rally. The inversion between the 2-year and 10-year Treasury yields is at its worst since 1982.

31. Sector RSI. And finally, how overbought/oversold are stock market sectors?