Daily Chartbook #229

Catch up on the day in 29 charts

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

As a reminder: The next DC will be published Wednesday, July 5.

1. CFO optimism. "Latest CFO Optimism Survey from ⁦[Duke University, Richmond Fed, and Atlanta Fed]  shows confidence in U.S. economy ticked modestly lower to 54.8% in 2Q23 (down from 55% in prior quarter) … optimism about respondents’ own companies fell from 67.8% to 67.2%."

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2. Corporate profits. "Corporate profits in Q1 fell for the 3rd consecutive quarter. Profit margins are as low as they have been at any point in the past decade-plus (excluding the COVID-related collapse in Q1 & Q2 2020)."

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3. PCE (I). Headline PCE rose by 0.1% to 3.8% YoY (lowest since April 2021) while core PCE increased by 0.3% to 4.6% YoY.

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4. PCE (II). Supercore rose by the least since July 2022 (+0.23%) to 4.5% YoY.

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5. Personal income & spending. "Personal Income and Spending were both expected to rise on a MoM basis and did but while incomes rose more than expected, spending rose less (+0.4% vs +0.3% exp and +0.1% vs +0.2% exp respectively)."

6. Spending categories. "Consumers pull back on durables goods, flat on nondurables & spending with discretion on services."

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7. Wage growth. Wage growth for both private and government workers accelerated in May rising by 5.8% (highest since Oct 2022) and 5.5% (highest since May 2022) YoY, respectively.

8. Chicago PMI. "The Chicago PMI prices-paid index sank in June to its lowest level since April 2020. The share cutting prices hit its highest level in over seven years."

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9. Consumer sentiment. Consumer sentiment (64.4), current conditions (69), and consumer expectations (61.5) were all revised higher.

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10. Q2 GDP. GDPNow estimate for Q2 growth jumped to 2.2% from 1.8% on June 27.

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11. MMF vs. bank deposits. Money market funds are on pace for record inflows (+$750bn YTD) while deposits at US banks saw record deposit outflow in the first half of the year (-$578bn YTD).

12. Long rates. "For the first time in 20 years, the consensus is now predicting that long rates will go down."

For the first time in 20 years, the consensus is forecasting lower long rates

13. Rates vs. VIX. "BofA suggests that if rate/VIX relationship hasn't broken down, then VIX not likely to peak until 2025."

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14. Global fund flows. "Net flows into global equity funds turned positive in the week ending June 28, largely driven by flows into EM (+$2bn vs -$5bn in the previous week)...Flows into global fixed income funds were modestly positive (+$0.5bn vs+$5bn in the previous week)."

15. Asset flows YTD. Government bonds and cash have seen the largest inflows this year while TIPS have seen the most outflows.

16. Retail positioning. “This chart shows retail positioning (a big component of this is Tesla).”

17. Private client allocations. BofA private client equity and cash allocations remain above and below average, respectively.

18. Buyback blackout. "The real intense blackout starts next week and lasts for 3 weeks."

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19. July inflows. "~9bps of new $$ gets put to work every July. On $25.7 Trillion in assets,  that is $23B in modeled July inflows."

20. SPX seasonality. "We are entering the best seasonal period of the year for US Equities. The first 15 days of July have been the best two-week trading period of the year since 1928. .. July 17th is when equities start to fade."

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21. Nasdaq seasonality. "July tends to be a good month for NDX with 15 consecutive years green in July (incl 2008)."

22. Max drawdown. "The Nasdaq's maximum drawdown in the first half was 8.7%, the smallest since 2.17."

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23. Equal-weight recovery. "Assuming October was THE low: On an equal-weighted basis, the S&P 500 is up only 14%...would be the weakest recovery on record."

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24. NYSE breadth. "NYSE A/D Issues looking to eclipse the former April/June twin peaks. Despite the popular falsehoods, breadth remains increasingly favorable for bulls."

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25. Small-cap breadth. "Russell 2000 can't yet breach double-digit territory when it comes to % of member making new 52-week high."

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26. Defensive breadth. "Traditional defensive sectors have pretty weak breadth profiles ... only 31% and 51% of Utilities (blue) and Cons Staples (orange) members, respectively, are trading above their 200-day moving average."

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27. Tech share. "Positioning in technology funds has reversed much of its decline since late-2021 and has nearly returned to historical highs."

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28. Sector P/Es vs. SPX. "Most parts of the market are relatively cheap to the long-run median--particularly the traditional cyclicals--while tech and discretionary live on the 'rich side of fair'."

29. EPS estimates. And finally, “S&P 500 EPS estimates dropped a bit in the last 2 weeks.”

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Have a great weekend and Happy 4th of July!

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