Daily Chartbook #185

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

1. US petroluem inventories. "Inventories fell by 0.4 MMbbl last week. Action was clearly in crude stocks, though, which fell 4.6 MMbbl w/w. Gasoline rose 1.3 MMbbl, which will likely be a welcome sign for those dreading summer pump $. Diesel continued to draw, down 0.4 MMbbl."

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2. Strategic Petroluem Reserves. "The SPR saw its 3rd weekly drain in a row."

3. Mortgage rates. "US mortgage rates increased last week by the most in two months to 6.43%, denting already sluggish demand...The group’s index of mortgage applications for home purchases dropped 10% in the week ended April 14, the steepest decline in two months."

4. Home prices. "The median U.S. home sale price fell 3.3% in March to $400,528, the largest year-over-year drop since 2012. That follows February’s 1.2% dip, which was the first annual decrease since 2012."

5. Global freight. "Global container rates slowed their decline to a crawl this past week. The composite rate decreased by just $1 per forty-foot container. There are already signs that spot rates have reached their bottom, but there is no certain direction ahead."

6. US trucking. "American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index fell 5.4% in March after increasing 0.9% in February...March’s sequential decline was the largest monthly drop since April 2020 during the start of the pandemic."

7. Economic growth expectations. "Fund managers believe we're heading for weaker economic growth."

8. Debt service ratios. "If a recession in 2023, Household balance sheets would enter recession in best position since WWII."

9. Debt ceiling. "A large majority of FMS investors (80%) believe that the US debt ceiling will be raised by Sep'23."

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10. Bank borrowing. "The Federal Home Loan Bank system—established during the Great Depression to help promote mortgage lending and now a source of liquidity for banks of all stripes—issued a record $495 billion of debt in March to fund loans."

11. Financial conditions. "Market conditions have nearly returned to where they were pre-SVB collapse. The Bloomberg U.S. Financial Conditions has almost retraced all of its tightening since then."

12. Dumb down. "People need five fewer years of education to understand a Federal Reserve monetary-policy statement since a review by officials in August 2020. Such remarks can now be processed by readers with the attainment level of a 15 or 16-year-old high school student."

13. VIX vs. Fed. "The CBOE VIX Index made a new 52-week low, at least partly due to hopes for Fed easing in 2H 2023. However, history clearly shows that Fed rate cuts tend to occur only when the VIX is higher than its long run average (20)."

14. Copper inventories. "Copper LME levels are reaching the lowest levels in 18Y.  While this is good for traders, it’s a pain for the energy transition process or anyone that needs copper."

15. USD perspective. "When you look at the US Dollar from a much broader perspective, you’ll notice that it hasn’t been as weak as the US Dollar Index itself."

16. Put/call ratio. "Equity put/call ratio is signaling that investors have loaded up on calls. Current levels have timed market declines throughout the ongoing bear market."

17. Rush to HY. "One of the largest high-yield bond exchange-traded funds—the iShares iBoxx $ High Yield Corporate Bond ETF—recorded one of its biggest single day of inflows this year on Friday...investors are warming to riskier investments."

18. Risk demand. "Global risk demand back to pre-SVB levels."

19. Risky vs. safe. "Risky vs. safe assets fund flows remain very negative, which is contrarian bullish for equities."

20. Investor Intelligence sentiment. "II bulls have crossed 50% for the first time since Jan 2022 & are at their highest since Nov 2021."

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21. Hedge fund leverage. "Gross has exploded and are back at absolute highs."

22. US vs. world equities. Hedge fund underweight positioning to US relative world equities is at extreme levels.

23. Global sector fund flows. Last 4 weeks and last 12 months.

24. Large cap growth. "JPMorgan’s active large cap growth mutual fund took in $8b in Q1 (as much as any ETF), bucking the shift towards value, passive and ETFs."

25. Most crowded trade. "Long tech and short US banks were not present the last time they conducted the FMS survey."

26. Bearish positioning. "Lots of discussion as to how stocks ‘can’t fall’ given bearish positioning, but as an example, large speculators/hedge funds built large net short positions (blue) in September 2007, right before S&P 500 fell by more than 50%."

27. Highs & lows. "2023 began with 33 days in a row of new highs > new lows. Since then 34 of 40 days have seen new lows > new highs. Bull markets consistently & persistently see new highs > new lows across a broad universe of stocks. We're not seeing that right now."

28. Earnings recoveries. "Earnings typically recover faster than they fall."

29. SPX bottoms. And finally, “on no occasion in almost 100 years did equities avoid falling to a new trough after the economy entered a contraction. Markets only found a bottom nine months after a recession began, on average.”

Thanks for reading!