Daily Chartbook #283

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

1. Home construction (I). "August housing starts (blue) -11.3% m/m vs. -0.9% est. & +2% prior (rev down from +3.9%) … building permits (orange) +6.9% vs. -0.2% est. & +0.1% prior."

2. Home construction (II). "Under the hood, multi-family rental starts plunged by the most since June 2020 while single-family permits rose for the 8th straight month."

3. Home construction (III). "This leaves Starts (SAAR) at their lowest since June 2020 and Permits (SAAR) at their highest since Oct 2022."

4. US freight (I). Cass "Freight shipments turned negative on a year over year basis in February 2023, have been in the red since, and the last comp is -9 percent. That is getting close to the 10 percent level where prior recessions have started."

5. US freight (II). "September has been a disappointment for the freight market. We saw a nice bounce in July and August and expected the rally to continue through the end of the quarter. Unfortunately, the opposite is happening."

6. OECD forecasts. Global GDP "growth will ease to 2.7% in 2024 after an already 'sub-par' expansion of 3% this year, according to the latest OECD forecasts."

7. Q3 GDP. "We boosted our Q3 GDP forecast to +3.3%."

8. GDP vs. GDI. GDP and GDI "are highly correlated, with a coefficient of 0.91, but the recent gap that has opened up is remarkable – the largest in the last 20 years."

9. US debt. "The US issued $1 trillion in debt in just the past 3 months."

10. Back to work. "Occupancy rose 3.4 points to 50.3% after the Labor Day holiday, according to Kastle’s 10-city Back to Work Barometer, surpassing 50% for the first time since July."

See:

11. UAW vs. D3. "Next UAW strike locations to come Friday 9/22 at noon barring ‘serious progress’ in negotiations. .. We suspect large pickup plants could be targeted, albeit D3 has .. 66/68/80 days of inventory – quite elevated vs. the post-COVID target of 50-60 days."

12. Government shutdowns vs. USD. "In mostly all cases, the USD depreciated broadly during the shutdown window and appreciated post resolution."

13. Last hike vs. US10Y. "Historically, the timing of the last rate hike coincided with a cycle peak in the 10-year Treasury yield."

14. Last hike vs. SPX. "Recessions, and the lead up into them, overwhelm any positive effects from looser financial conditions, and coincide with a weakening in the stock market."

15. Oil vs. Energy sector. There's a wide divergence between the price of oil and Energy sector relative performance.

16. Foreign buyers (I). "The world is piling into US Treasuries. Foreign holdings of USTs rose to $7.655 trillion—strong demand as real rates hit 15-year highs."

17. Foreign buyers (II). "Net foreign purchases of U.S. equities down to $20.8 billion in July … swift move lower from June, but series is volatile over time and still in positive territory."

18. Investor flows. "Equity ETFs back in favor again as U.S. large-cap funds had 3rd consecutive week of large inflows; on 1-month basis, large- and mid-cap ETFs hold top spot for inflows at 44.2% ... fixed income also had inflows last week."

19. Retail participation. "Retail participation is currently at 10.7% of the total market volume, and at 88th%-ile relative to the last 6 years."

20. Client flows. "Clients bought stocks in 6 of the 11 GICS sectors, led by Financials (biggest inflows since April), Cons. Disc. (biggest inflows since June), and Comm. Services. Cons. Disc. has now seen inflows for the last 6 weeks (longest recent buying streak of any sector)."

21. HFs vs. Semis (I). "In cumulative notional terms, Semis & Semi Equip is by far the most net sold US subsector not only within Tech but also across all sectors since the start of August."

22. HFs vs. Semis (II). "Semis & Semi Equip stocks collectively now make up nearly 40% of the total US Info Tech short market value, which is approaching multi-year highs."

23. HFs vs. Discretionary. "Discretionary net flow moving back towards May lows."

24. HFs vs. Staples. "Despite a move away from soft landing, our PB data shows sizeable net selling in the group (as of this past Friday)."

25. HFs vs. Utilities. "Managers net sold US Utilities stocks at the fastest pace in 11 weeks, led by long sales. This week’s net selling ranks in the 92nd percentile vs. the past five years."

26. Small-cap call volumes. Small-cap call volumes have dropped to 6-month lows.

27. Buybacks. "Corporate client buybacks accelerated last week but have been tracking below seasonal trends every week since May."

28. Buyback vs. earnings. Stronger earnings are typically followed by more buybacks.

29. Growth expectations vs. returns. “Low long-term earnings growth tends to be bullish for the S&P 500, suggesting potential price returns of around +25% over the next 12 months.”

30. SPX breadth. And finally, over the LTM, “only 35% of the S&P 500 has managed to outshine the index itself, marking one of the lowest percentages we've witnessed in the past decade.”

Thanks for reading!