Daily Chartbook #215

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

1. Rent prices. "The median U.S. asking rent fell 0.6% year over year to $1,995 in May—the largest annual decline since March 2020...May’s drop also represented the first annual decline since March 2020 on a revised basis."

2. Rising payments. "Gen Z and Millennials are seeing a much higher rise in median rent and mortgage payments than older generations."

3. Food prices. "Global food inflation continues to ease … UN World Food Price Index (blue) fell in May to lowest since April 2021; year/year % change (orange) at worst/most negative since 2015."

4. NBER indicators. "The two positives keeping the economy in expansion are real spending on services, and jobs. The other indicators are either flat or down from their peaks."

5. Quiet credit crunch. "Watch the 'quiet credit crunch .. 30 large US companies defaulted [in the] past 5 months, 11 [in the] past 4 weeks .. just as unemployment claims turning higher .. interrupts new ‘no recession ‘23’ narrative'."

6. Net worth vs. disposable income. "Net worth as % of Disposable Income fell to 760% for Q1 2023 from 762% in Q4 and off the record high of 840% in Q1 2022."

7. Spending vs. disposable income. Consumer spending is outpacing disposable incomes.

8. Card spending (I). "Consumer spending appears to have been relatively stable [in May], with seasonally adjusted (SA) card spending per household increasing by just 0.1% between April and May."

9. Card spending (II). "Retail spending has ticked up in recent months, following a longer period of decline. Services spending, on the other hand, has shown some signs of flattening off after having risen steadily through February 2023."

10. BTFP. "Latest Fed lending to banks via the Bank Term Funding Program (BTFP) hit a new record at $100bn this week. Encouragingly, discount window usage is back to pre-banking stress levels."

11. QT vs. QE. "Fed QT inception to date, the 'plan' was $750bn QT. The 'end result' is $100bn QE instead."

12. Startup funding. "Venture-backed businesses in the U.S. raised $346 billion in venture capital in 2021...Startups in the U.S. raised $37 billion in the first quarter of this year, down 55% from the first three months of last year."

13. Real yields vs. equities. "The link between real bond yields and equities has recently broken down."

14. VIX vs. MOVE. "The VIX/MOVE ratio reached its lowest level since 1996, reflecting a stark contrast between stock investors’ calmness and rates investors’ relative unease."

15. Stocks vs. bonds. "Latest breakout extended $SPX rally to 7.ó mnths, which is longer than any prior bear market rally in history. More consistent with new bull than ongoing bear is SPXs relative performance vs 10-Yr. Treasury. On June 2nd, Stock/ Bond Ratio made an all-time high!"

16. Global liquidity. "Global excess liquidity has started to rise from depressed levels as inflation and growth are falling, 'freeing up' asset-supporting liquidity."

17. Global equity flows. "Global equity funds posted outflows for the eighth consecutive week in the seven days leading up to June 7...investors withdrew a net $18.84 billion from global equity funds, the largest weekly net selling since March 15."

18. Buybacks. "Stock buybacks by corporate clients year-to-date remain above the highs of 2022."

19. Retail net purchases (I). "Retail investors are back in the market…"

20. Retail net purchases (II). "…and loving small caps again."

21. Hedge funds vs. cyclicals. "Cyclical net ownership is in the 1st % tile going back a decade."

22. Hedge funds vs. mega cap tech. "Mega Cap Tech net exposure across JPM's PB is at a 3z level, a 5yr+ high."

23. SPX breadth. "S&P 500 $SPX Advance/Decline Line is within 50 points of its all-time high."

24. Sector breadth. “From a breadth perspective, along with Technology, only Industrials, Real Estate, Energy, and Financials - some of the worst performers YTD -  have more than 60% of issues trading above their 50-day moving averages.”

25. Earnings outlook (I). Looking out into Q4, earnings are expected to grow by 8.2% YoY, which would be the highest annual growth rate since Q1 2022 (9.4%).

26. Earnings outlook (II). Nine of eleven sectors are expected to report YoY earnings growth in Q4, five of which are expected to see double-digit growth.

27. Tech P/S. "Forward price/sales for Tech sector has climbed sharply relative to broader market ... overall ratio hovering near multi-decade high."

28. Trough earnings multiple. "Over the past 50 years, the average multiple on trough earnings has been exactly 20X."

29. SPX 450 P/E. "Excluding the 50 biggest stocks, the S&P 500 trades at just 15x, which is a full standard deviation below the historical average multiple (18x)."

30. Bull market checklist. And finally, “only 50% of signposts have been triggered vs. 80% before prior market bottoms.”

Thanks for reading!