Daily Chartbook #238

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

1. Home listings. "The number of homes for sale fell 15% to an all-time low in June, the biggest decline in two years…New listings fell 30.6% from a year earlier to roughly 450,000—the lowest level and largest annual decline on record aside from April 2020."

2. Home prices. "The median sale price was just 1.5% below its all-time high in June, and the average home sold for above its list price for the first time in roughly a year."

3. Home price growth. "June’s median sale price was down 0.6% from a year earlier—the smallest decline of the past five months."

4. Auto prices vs. incentives. "One of the strongest predictors of used car prices...is new vehicle incentives... new vehicle incentives are rising, while pricing is normalizing."

5. Credit applications. Credit applications (all types) in June fell to their lowest since October 2020 while the rejection rate among applicants climbed to the highest since June 2018.

6. Job postings. "Job postings were down 17% year-over-year on Friday, according to the Indeed Job Postings Index. That decline is more severe for high WFH occupational sectors, which were down 36% YoY. Low-remote sectors were only down 9.7%."

7. Reshoring. "Most of the reshoring of production to the US that has taken place is in industries where the CHIPS Act and the Inflation Reduction Act offer domestic producers large subsidies."

8. Recession probability. Goldman Sachs cuts its probability of a US recession in the next 12 months to 20% from 25% due to progress on inflation.

9. Empire State Manufacturing.  The headline index fell by 5.5 to 1.1 in July which was above market expectations. New orders ticked up while employment increased and prices continued to moderate.

10. Oil demand forecasts. "OPEC, IEA, EIA ... all see rising Q3 oil demand."

11. Energy prices. "The Bloomberg spot energy price index is now just above its 100-day moving average. That could be taken as a sign of resilient demand."

12. Dollar shorts. Short positioning in the US dollar is at extreme levels.

13. Corporate spreads. "It’s almost as though the bank failures in March were just a bad dream. Bloomberg’s US high-yield credit index is trading at just as tight a spread over Treasuries as before the SVB failure."

14. Bond Twitter sentiment. "Bond bulls gained a big confidence boost from the failed break in yields above 4% (also n.b. the trend in bond sentiment)."

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15. Exposure plans. Just 17% of JPMorgan clients plan to increase equity exposure while 79% are considering adding bond portfolio duration.

16. Sentiment indicator. Goldman's equities sentiment and positioning indicator has moved further into stretched territory.

17. Equity positioning. "Both professional and retail investors continue to chase the market higher by increasing equity exposures. While not extreme yet, suggesting more upside, it is rising quickly."

18. Growth vs. Value (I). Growth's outperformance vs. Value has stalled. 

19. Growth vs. Value (II). "Performance depends on the index: R1000 Growth (Tech-biased) outperforming R1000 Value significantly YTD (blue); not the same for S&P 500 Pure Growth (Energy-biased) vs. S&P 500 Pure Value (orange)."

20. Sector breadth. "8 of 11 sectors with at least 50% of constituents above their respective 100 day moving average."

21. Retracement. "The stock market has regained nearly three-fourths of the ground it lost last year. Bear-market rallies don’t retrace much more than half their preceding decline. When they do, they are usually new bull markets."

22. Earnings day moves. "The average implied move this quarter of 5.4% is moderately higher than last quarter, but lower than the prior three quarters."

23. Earnings vs. performance. "On average, earnings season accounts for a disproportionate amount of the annual S&P 500 price performance."

24. Earnings revisions (I). "Equity strategists are boosting earnings forecasts for the S&P 500 Index over the coming year faster than they are marking them down."

25. Earnings revisions (II). "Our earnings revision ratio (number of upward vs. downward revisions)...improved to 1x in June, led by Industrials and Consumer Discretionary."

26. Guidance ratio. "Our Guidance Ratio (number of above-vs. below-consensus guidance) inflected higher in recent months, with the 3-mo. ratio jumping to 1.14x, the strongest level since December 2021."

27. Margin expectations. "[While] margin expectations have pulled back from record levels, analysts remain very optimistic that economic growth will continue getting stronger."

28. Q2 earnings (I). "30 S&P 500 companies (including early reporters) contributing 11% of S&P 500 earnings are in. The earnings beat rate is above average at 77% but is weaker than last quarter’s 90%."

29. Q2 earnings (II). "In aggregate, actual earnings reported by these 30 companies have exceeded estimated earnings by 8.8%."

30. Special rebalancing. And finally, here's what the Nasdaq-100's top 25 will look like following the index's "special rebalance" on July 24.

Thanks for reading!