Daily Chartbook #226

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

1. Case-Shiller (I). "The S&P Corelogic (Case Shiller) national home price index shows poorly on YoY (NSA -1.7%) due to base effects but just put up its best month (+0.91% vs 0.4% est) in 11 months.  Bear in mind It is April data."

2. Case-Shiller (II). "Using a shorter six-month annualized basis, U.S. home prices have already hit a bottom and are rising again."

3. FHFA. "April FHFA⁩ House Price Index +0.7% m/m vs. +0.5% est. & +0.5% prior (rev down from +0.6%) … 4th month of consecutive gains."

4. New home sales (I). "Expectations were for a 1.2% MoM decline in May but instead new home sales exploded 12.2% MoM...That is the 3rd straight month of MoM gains and sends new home sales up 20% YoY."

5. New homes sales (II). "The median home sale price $416,300 which was an increase from last month but only after huge downward revisions for past 4 months."

6. Alt-CPI. "An update to our Alt-CPI metrics using latest real time housing data. Case Shiller ticked higher 3m in a row but...Our real Time shelter inflation still +1% vs 8% in BLS. Alt Headline Inflation to 1.5% last 12m. Alt-Core inflation 2.2% last 12m."

7. Durable goods (I). "Durable goods orders preliminary print jumped a strong 1.7% MoM...That is the 3rd straight month of MoM growth and has pushed the YoY growth in durable goods orders to 7.3% - the biggest since Oct '22."

8. Durable goods (II). "Cap goods orders nondefense ex-air (blue) +0.7% m/m vs. +0.1% est. & +0.6% prior (rev down from +1.3%) … shipments nondefense ex-air (orange) +0.2% vs. +0.2% est. & +0.4% prior (rev down from +0.5%)."

9. Redbook. "Redbook Sales +0.5% vs. same week last year. Downward trend resumed."

10. Consumer confidence. "Consumer Confidence Index rises 7.2pt to 109.7 in June: high since Jan '22."

11. Sentiment check. Fintwit vs. University of Michigan vs. Conference Board.

12. Richmond Fed manufacturing. "June Richmond Fed Manufacturing Index (blue line) -7 vs. -12 est. & -15 last month…new orders, capex and shipments still in contraction but up from prior month…employment (orange line) dropped to 2."

13. Fiscal stimulus. "Fiscal support has been much higher over the past 12 months than most investors appreciate based on our conversations. This is expected to peak and reverse next month and could amount to a 6ppt headwind to nominal GDP over the next 12 months." 

14. Q2 GDP. The Atlanta Fed's GDPNow model estimate for Q2 growth ticked down to 1.8 from 1.9 on June 20.

15. Bonds vs. PMI. "Current levels of manufacturing PMIs imply downside for bond yields."

16. SPX vs. global bonds. "The relative performance of US equities vs. global bonds has broken out of a 15-month range."

17. Risk demand. "Morgan Stanley's Global Risk Demand Index (GRDI) has now risen above its traditional sell signal of +2SD."

18. Exposure plans. Just 36% of JPMorgan clients plan to increase their exposure to equities.

19. Investor flows. "On rolling 1-month basis, equities have made up >75% of ETF inflows; remaining 25% shared between government, corporate, muni, and agg bond ETFs."

20. Client flows. Last week, BofA "clients were net sellers of US equities (-$1.4bn; first outflow in three weeks)...Clients sold stocks in eight of the 11 sectors, led by Industrials and Financials...Cons. Disc. continues to lead inflows after seeing record inflows...the previous week."

21. Rebalancing. "Heading into month-and quarter-end, the desk's model estimates a net of $26 billion of US equities to sell from US pensions given the moves in equities and bonds over the month. This is expected to be a significant rebalancing event."

22. P/E vs. real rates. There is a wide divergence between the S&P 500 forward P/E multiple and real rates.

23. ERP. "Equity risk premium remains at the lowest levels in over two decades. Opportunities in fixed income appear more attractive."

See:

24. Equity valuations. “The US equity market is trading at valuations well above the historical average and is now close to 20x forward consensus earnings.”

25. Russell 2000 price-to-book. Russell 2000 "trailing P/B multiple currently registers 1.9x, in the 15th percentile vs. history since 1995."

26. Margins vs. ISM. "It would be unusual for profits margins not to fall from here."

27. EPS revisions (I). "The breadth of EPS revisions is less negative and 12m forward EPS is up 2%."

28. EPS revisions (II). "EPS revisions for S&P500 have finally moved positive for some weeks, the first time since last summer, but any continued improvement will be at odds with a potentially weakening labour market."

29. Megacap EPS estimates. "It is intriguing how the recent rise in tech megacap stocks has not been accompanied by a corresponding growth in projected earnings, despite the enthusiasm surrounding AI...We have seen the complete opposite of that in some cases."

30. VIX seasonality. And finally, “seasonality suggests that a VIX floor could be near, even if the precise catalyst higher remains elusive.”

Thanks for reading!