Daily Chartbook #219

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

Administrative note: There will be no DC published on Monday, June 19.

1. Global financial tightness. "Recent hawkishness in the UK, Canada and Australia has not been enough to significantly alter the message from the Advanced GFTI that financial conditions should keep loosening."

2. Jobless claims. Initial jobless claims "were unchanged this week at 262,000, the highest level in over 18 months. The 4 week average increased 9,250 to 246,750. Continuing claims, with a one week lag, increased 20,000 to 1.775 million."

3. Retail sales (I). Retail sales unexpectedly rose 0.3% (vs. -0.1% expected) led by building materials and garden equipment (2.2%) and motor vehicles and parts (1.4%). Gas stations (-2.6%) and misc retailers (-1%) saw the largest drops.

4. Retail sales (II). YoY retail sales increased 1.6% while core sales (excludes gas/autos) rose 0.4% MoM to +3.6%YoY.

5. NY manufacturing. The "survey came in 21.7pts higher than expected at+6.6 and up 38.4 above May's level. The ISM adjusted level rose 8pts back into expansionary territory (51.45).  New orders were up 31.1; # employees down -0.4 and PRICES were soft AGAIN, paid down 12.9 and received down 14.6."

6. Philly manufacturing. The "business outlook declined 3.3 to -13.7 but was 0.3 better than consensus.  Prices paid declined 0.4 but received rose 7.1. # of employees rose 8.2 and new orders dropped 2.1."

7. Imports/export prices. "US Import Prices fell 5.9% over the last year, the largest YoY decline since May 2020. US Export Prices fell 10.1% over the last year, the largest YoY decline on record w/ data going back to 1985."

8. Industrial & manufacturing production. Industrial production fell 0.2% MoM (vs. +0.1% expected) to +0.2% YoY while manufacturing production increased 0.1% MoM (in-line) to -0.3% YoY.

9. Business inventories. "April business inventories +0.2% m/m vs. +0.2% est. & -0.2% prior (rev down from -0.1%) … slightly below longer-term average and out of recessionary territory for now."

10. Q2 GDP. The GDPNow model estimate for Q2 GDP growth dropped to 1.8% from 2.2% a week ago.

11. Copper bears. "Speculators are net bearish copper for the first time since early 2020."

12. Credit > equities. "The yield on BBB credit is at the highest levels in 15 years relative to the earnings yield on the S&P500."

13. AAII sentiment. "AAII bears drop to lowest level since July 2021. AAII bulls > bears for the second week in a row (which is historically unremarkable but something we have seen only one other time in the past 18 months)."

See:

14. Fear & Greed. "A lot of hand-wringing going on as the Fear & Greed Model crosses above 80. As one who hates to see overly bullish sentiment, I get it. But, just for the record, it’s not exactly an automatic 'death sentence'."

15. Risk-on. The All Star Charts "Risk-On / Risk-Off Ratio (3rd pane) is BREAKING OUT to new highs after over 2 years stuck within a sideways range. This is not bearish…"

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

17. Investor flows. "Investors continued to put money to work in equities last week, with bulk going to small-cap and global equity funds ... interest in bonds hasn't completely faded, but taking a breather relative to earlier this year."

18. Households v. equities. "Households’ allocations to stocks remain elevated."

19. Active managers. The NAAIM Exposure Index fell to 81.6 from 90.

20. Regional flows. "Money managers have bought N America aggressively since May, and ditched part of the crowded European long."

21. Trading flows. Money managers have done "more buying than selling over the past month."

22. Gross vs. net leverage. "Hedge funds have increased risks during the latest melt up."

23. Global fund flows. "Flows into global bond and cash funds remain very strong this year."

24. Regional EPS expectations. "Profit expectations are near all-time highs (12m forward EPS by region, in local currency, Europe in euros)."

25. SPX A/D. "The S&P500 Advance-Decline line is pushing up against new all-time highs, because it's not just 5 stocks that are rising."

26. Software vs. telcos. "One interesting divergence that’s emerged in the US TMT space of late has been HF clients continuing to add shorts in Telcos, while covering shorts in Software...The difference in 20d short flows between the two industry groups has hit very extreme levels."

27. Semis sales. "There is a huge divergence between semiconductor stocks and underlying sales."

28. Profits vs. drawdowns. "Major S&P 500 lows associated with recessions (red) have occurred when profits (blue) are either at worst point or recovering (in year/year terms); different trend this time, as profits kept falling after market's October low."

29. VIX seasonality. “The $VIX has followed its seasonality patterns very closely this year. Mid-late June and July are historically the least volatile months for stocks with summer trading in full effect.” 

See:

30. June OpEx. And finally, “$2.2 Trillion notional $SPX/ $SPY contracts are set to expire tomorrow during the quarterly expiration. This will be the largest June OpEx on record.”

Thanks for reading!