Daily Chartbook #22

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

1. EIA. The US Energy Information Administration’s report in charts.

2. Low US storage. Storage levels for crude with SPR (Strategic Petroleum Reserve), gasoline, distillate, and jet fuel are very low.

4. UK CPI. Inflation in the UK reached double-digits (10%) for the first time in 40 years, fueled by rising prices for “transport and housing & household services (i.e. heating your house)”.

5. UK vs. US, core. Year-over-year core CPI—which excludes food and energy—in the UK (white, 6.2%) is now higher than it is in the US (yellow, 5.9%).

6. Rising expenses. Low-income households are struggling to pay bills

7. Retirement savings (I). According to an Anytime Estimate Retirement Finances Survey, 63% of Americans tapped into their retirement savings because of Covid.

8. Retirement savings (II). The top reason Americans don’t save for retirement is that they don’t earn enough.

9. Retirement savings (III). And most have not saved enough for retirement.

10. College cost simmer. For the first time in 30 years, college tuition and fees for both public and nonprofit universities have declined.

11. Retail sales (I). Retail sales stalled with no growth in July.

12. Retail sales (II). Retail sales excluding autos (bottom chart), on the other hand, unexpectedly increased by 0.4% (consensus was -0.1%).

13. Retail sales (III). Year-over-year, retail sales (red) are up 10.3% while core retail sales (green) are up 8.7%.

14. Retail sales (IV). Topline contributors (YoY%).

15. Retail sales (V). Sales were higher across all categories except “autos, gasoline, and general merchandise stores”.

16. Retail sales (VI). Here are the volumes of sales by category after adjusting for inflation.

17. Retail sales (VII). After adjusting for inflation, retail sales are “down 1.1% over the last 6 months”. Nominal retail sales are up 3.6% over the same period.

18. Business inventories (I). Business inventories increased by an expected 1.4%, with stocks increasing most for retailers and merchant wholesalers while slowing significantly for manufacturers.

19. Business inventories (II). Inventories are up an alarming 18.5% year-over-year.

20. Chip outlook. Supply for memory chips—which are among the most sensitive semiconductor segments to global economic performance—is forecast to outstrip demand in 2023.

21. Recession probabilities. From Goldman Sachs: “our subjective probability that the economy enters a recession in the next 12 months is the highest in the Euro area (60%) and the UK (35%) followed by the US (30%), Canada (30%), and Australia (25%).”

22. Leader morale. Bosses are not confident.

23. Cash is still king. A look at where global fund managers are overweight.

24. PCE catalyst. “Most fund managers believe that PCE dropping significantly is the biggest catalyst for a Fed pivot.”

25. Real income to rise? Goldman expects “real income to pick up as headline inflation moderates (despite slower job growth)”.

26. Fed odds. FOMC minutes released today were taken as dovish by the market. Morning odds favored a 75bps September hike. By the end of the day 50bps was seen as more likely

27. Q3 GDP. Atlanta Fed’s GDPNow estimate for GDP growth in Q3 moved down to 1.6% from 1.8% yesterday.

28. Ending with equities. Secular growth stocks are still very expensive on a price-to-sales basis.

29. Earnings (I). With more than 90% of S&P reported, 82% met or exceeded Wall Street's expectations. Real estate (97%), industrials (90%), and energy (90%) were the leaders in the percentage of stocks that beat or met estimates.

30. Earnings (II). “Earnings and Sales surprises are below the numbers we've seen over the last two years but above the longer-term averages this season”.

31. Earnings (III). The breadth of beats on earnings and sales was broad across all sectors.

32. Earnings (IV). The companies getting the most positive earnings revisions are those with higher exposure to US revenues.

33. US vs. World. And finally—if you’re going to invest—make sure you have exposure to US equities...