Daily Chartbook #285

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

1. Existing home sales (I). Existing "home sales dropped 0.7% MoM leaving sales down 15.3% YoY."

2. Existing home sales (II). "With inventory so restricted, prices have held firm. Indeed, the median price was above  $400,000 for the third month in a row, at $407,100, and is up YoY for the second month in a row, at +3.9%."

3. SEP. "The Fed now expects stronger growth and lower unemployment both this year and next, and slightly cooler inflation this year with steady inflation next year as compared to the prior projections."

4. Negative impulse. "According to Oxford Economics, the maximum impact of the Fed’s tightening will be felt over the next couple of quarters."

5. CEO outlook. "Since the Fed started raising rates in March 2022, CEOs have gradually worried more and more about the economy slowing."

6. Philly Fed Manufacturing. "Business Outlook came in substantially weaker than expected dropping 25.5pts to -13.5 or 12.5 below estimates…The weakness was in New orders which dropped 26.2 to -10.2."

7. Jobless claims. Initial jobless claims dropped sharply to 201k (vs. 225k est), the lowest since late January. Continuing claims fell to an 8-month low.

8. AI vs. jobs. "The higher the odds are that a job can be done remotely, the greater its potential exposure is to GenAI-driven change."

9. Card spending. "Total card spending per HH was -0.2% y/y in the week ending Sep 16…Despite the increase in gas prices, we do not see clear signs of cracks in lower-income spending."

10. Delinquency rates. "Credit delinquency rates are generally still below or near their pre-pandemic levels."

11. US LEI. "The Leading Economic Index declined in August for the 17th month in a row, the longest down streak since 2007-08. The Conference Board is forecasting a decline real GDP growth from 2.2% in 2023 to 0.8% in 2024."

12. Gold call volumes. $GLD saw its highest call volume yesterday since March.

13. US10Y vs. global equity yields. "US 10y yields have just risen back above global equity yields."

14. Earnings yields vs. US10Y. "With the surge in interest rates again today, the earnings yield for the Russell 3000 index is now below 10-year yields for the first time in 21 years."

15. Earnings yield vs. cost of capital. "The earnings yield continues to zig while the cost of capital zags."

16. AAII. "Bullish sentiment is at a 16-week low; below avg. for 5th time in 6 weeks."

17. Active managers. The NAAIM Exposure Index ticked down to 54.3 from 57.9 over the past week.

18. ETF sentiment. The top 10 ETFs with the most bullish (green) and bearish (red) sentiment.

19. ETF valuations. The cheapest and most expensive ETFs.

20. Estimate CTA flows. "Absent a rebound in spot, trend following CTAs will likely start to be sellers over the next few days."

21. HFs vs. Discretionary. Hedge funds are increasing bets against Discretionary stocks.

22. Equal-weight vs. cap-weight (I). "The valuation gap between the top 7 stocks and SPW is at the highest level since the Tech Bubble, suggesting more upside in SPW than the cap-weighted index."

23. Equal-weight vs. cap-weight (II). "During 'Recovery' cycles, SPW consistently outperformed SPX, every time except in 2002 by 5.7ppt on average."

24. Equal-weight Discretionary. "The Goldman Sachs macro outlook implies the average Consumer Discretionary stock will lag the equal-weighted S&P 500 by 7 pp during the next 12 months."

25. Bear market vs. leadership. "Bear markets have historically resulted in leadership changes, and we believe secular forces today are greater risks to the last decade’s winner (i.e., Tech) than the old economy."

26. Government shutdowns vs. SPX. "Historically, government shutdowns have not had a significant impact on the US stock market."

27. Unemployment rate vs. SPX. "Historically, the worst time to buy stocks is when unemployment is low (<4%) and rising. This is the current situation."

28. Global earnings revisions. "In September, the Global Earnings Revision Ratio moderated from 0.90 to 0.78."

29. EPS consensus. Earnings estimates for FY23 and FY24 are being revised higher.

30. Valuation vs. returns. And finally, the longer the holding period, the more valuation matters for returns.

Thanks for reading!