Daily Chartbook #261

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

1. New construction. "Homebuyers are turning to newly built single-family homes as overall inventory sits at an all-time low."

2. Auto inventories. "Auto production is now well above its 2019 average, and is unlikely to rise much further."

3. Used vehicle prices. "Wholesale used-vehicle prices increased 0.1% from July in the first 15 days of August…[the index] rose to 212.0, which was down 7.8% from the full month of August 2022."

4. Card spending. "Total card spending per HH was up 0.6% y/y in the week ending Aug 12, according to BAC aggregated credit and debit card data."

5. Household balances. "Savings and checking balances for income groups spanning $50k to >$250k are higher than they were in 2019."

6. Corporate sentiment. "Aggregate corporate sentiment remains challenged largely due to restrictive Monetary Policy...with ongoing management concern around high Cost of Capital and tight credit conditions."

7. Jobless claims. "Initial claims were 250,000 last week. The 4 week average increased to 234,250. Continuing claims with a one week delay were 1.716 million. Most importantly, YoY the 4 week moving average is up 9.5%. This is well below the 12.5% YoY increase necessary to trigger a new caution."

8. Philly Fed Manufacturing (I). "Philly Fed's current activity index for mfg turned positive for August--first positive reading in a year. The weaker future activity index, however, pulled back to near neutral."

9. Philly Fed Manufacturing (II). "This is potentially concerning and at odds with the notion that the inflation slowdown is durable. The six-month prices paid index in the Philly Fed surged to +53, the highest since June 2022."

10. CB Leading Index. The index "declined in July for the 16th month in a row, the longest down streak since 2007-08. The Conference Board is now forecasting a 'short and shallow recession in the Q4 2023 to Q1 2024 timespan'."

11. SPX vs. CB Leading Index. "The S&P normally has a very close relationship with the outperformance of leading versus coincident data. But this year stocks have rallied despite still-weak leading data."

12. CTAs vs. oil. "Peak rate expectations and an increased chance of a soft landing have triggered a rotation into oil, with speculative positions in trend following funds back to 1H22 levels."

13. Global yields. "The yield on a Bloomberg index for total returns on global sovereign debt rose to 3.3% Wednesday, the highest since August 2008."

14. FMS vs. long-term rates. "And the market is doing what it tends to do best: Moving against the consensus view."

15. Lost returns. "Closing in on a lost decade for long-term US government bonds. TLT now has a negative total return going back 9 years (obviously even worse w/inflation)."

16. AAII sentiment. "The weekly decline in the bull-bear spread of over 13% represents the second largest weekly decline this year."

17. NAAIM. The NAAIM Exposure Index fell to 59.9 from 65.5 as active managers continue to reduce exposure to equities.

18. Money-market funds. “About $40 billion poured into US money-market funds in the week through Aug. 16.…Total assets reached $5.57 trillion, versus $5.53 trillion the previous week.”

19. Client flows (I). Last week, "clients bought Consumer Discretionary stocks for the first time in six weeks, while Staples saw outflows for the first time in three weeks."

20. Client flows (II). "Energy ETFs saw the biggest inflows among sector ETFs while Materials ETFs saw the largest outflows. Financials saw ETF inflows for the first time in six weeks."

21. Put-to-call ratio. "CBOE put buying reached its highest level since the banking panic yesterday (ratio INVERTED on this chart)."

22. Options flow. Options flow is at its most bearish in 2023.

23. Top of book. "This is an important chart showing the deterioration of liquidity. That makes re-scuffling more complex with wider bid/ask. It is also typical of summer periods. Less liquidity means less people on the other side bidding/executing your trades/offers."

24. S&P rotation. Investors are rotating from the market cap weighted to the equal-weighted .

25. Return dispersion. "If it seems as if picking the right sector or industry has been critically important in 2023, there’s evidence to back it up."

26. Beats reward. "The reward for EPS beats has been close to 10Y lows."

27. Global beats. "The proportion of companies that beat Q2 earnings estimates rose in all regions except Europe."

28. H2 earnings. "Second-half US earnings estimates will be harder to beat."

29. OpEx. "August OpEx tomorrow. $SPX/ $SPY has around $1T notional open interest set to expire."

30. SPX vs. 50MA. And finally, “the S&P 500 closed beneath its 50-day MA [Tuesday] for the first time in more than four months. This by itself isn't a reason to turn overly bearish. Since 1990, higher a month later 8 of 9 times. Also, higher a yr later 8 of 9 times and up 14.1% on avg.”

Thanks for reading!