Daily Chartbook #276

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

1. Food prices. Global food prices fell 2.1% in August to the lowest in over 2 years.

2. US imports. "US importing more from Mexico than China for 1st time since '03, weak Mex peso = weak US economy."

3. Used vehicle prices. Used car prices up 0.2% MoM in August, down 7.7% YoY.

4. Price changes. "Another sign of normalization in the inflation process - companies changing prices less frequently (frequency of price moves in red..)."

5. Net interest payments. "Corporate net interest outgoings, which plunged another 9% in Q2 QOQ (not annualized)...has now slumped 30% compared to a year ago."

6. US defaults. "We expect US defaults will peak in the middle of next year before dropping back down."

7. Recession probabilities. "DB's recession model estimates the likelihood to be over 90%, and still ~50% if the signal from the inverted yield curve is taken out."

8. Wholesale inventories. "July wholesale sales (blue) +0.8% m/m vs. +0.2% est. & -0.7% prior (strongest since June 2022); inventories (orange) -0.2% vs. -0.1% est. & -0.1% prior."

9. Retail stores vs. workers. "While the number of U.S. retail establishments was 1.5% higher in 2022 than 2019, the number of retail sales workers fell 12% over that period."

10. Household wealth. "The net worth of American households & nonprofits increased by $5.4 trillion in Q2'23. The value of directly and indirectly held corporate equities increased $2.6 trillion and the value of real estate increased $2.5 trillion."

11. Permian production. "The most active oil-producing basin in the US is now experiencing a contraction in the number of operating rigs…Keep in mind that this basin accounts for nearly 40% of all oil production in the US."

12. Oil vs. stocks. "Value, and to a lesser extent small caps, tend to outperform when oil price rises."

13. Crude ETF outflows. "The largest exchange-traded product (BRNT) in the oil market posted its biggest daily outflow on record" on Tuesday totaling ~ half a billion dollars.

14. Energy ETF flows. "There’s been an exodus out of the [Energy] ETF space over the last year. Flows not necessarily a signal, but a helpful sentiment data point to give some thought towards.

15. Energy vs. hard/soft landings. "Heading into a recession, the Energy Sector leads the S&P. Around soft landings, Energy lags significantly. Oil's late-cycle performance can cause a recession or facilitate a soft landing."

16. Fixed income flows. "Global bonds extended their positive streak with an inflow for the 24th consecutive week...Once again, the US dominated the flows, attracting $3.5 billion" for the 36th straight week of inflows.

17. UST positioning. JPMorgan's Treasury Client survey shows that "net long positioning has declined to its most neutral levels since late May."

18. SPX vs. T-bills. The SPX earnings yield over cash yield (T-bills) is the lowest since 2000 (-90bps) and represents a headwind for stocks.

19. Tech outflow. Tech funds saw their first outflow ($1.7bn) since September.

20. Private client flows. BofA private clients continue dumping TIPS.

21. HFs vs. Payments. "L/S ratio to payments tracks lower."

22. EPS forecasts. EPS forecasts for 2023 (dark blue) and 2024 (light blue) by sector.

23. Re/de-ratings. 1- and 3-month EPS (green) and PE (light blue) re/de-ratings by industry group.

24. Global earnings revisions. "US earnings revision momentum now stronger than the rest of major global groups. China still a big drag."

25. Global valuations. "Relative to other regions globally, Europe is one of few markets trading below its historical valuation."

26. Global breadth. "Global breadth has dropped to a new YTD low. Fewer than 1/3 of ACWI mkts are above their 200d. Not just about USD strength. Even on local currency basis, just 40% are above their 200d."

See:

27. Investors vs. options duration. "Investors have continued to gravitate to shorter-duration options."

28. 0DTE effect. "CBOE concludes that there is basically no market impact noted from 0DTE option trading on SPX index intraday volatility and price patterns."

29. SPX seasonality. "The S&P 500 may be coming up on the best of times when it comes to the calendar, but to get there, it must get through the worst of times first."

30. Post-inversion rallies. And finally, “in nearly seven decades there has never been a post-inversion equity rally that was not completely reversed going into subsequent recessions/bear markets.”

Have a great weekend!