Daily Chartbook #294

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1. Mortgage demand. The MBA Mortgage Purchase Index fell to its lowest since 1995 as mortgage rates rose to 7.53%.

2. UAW vs. trucking. "The UAW strike is having a massive impact on trucking volumes. I haven't seen this big of a drop in trucking contract volumes outside of a holiday since the start of COVID. Contracted load volumes are down over 12%."

3. Global Composite PMI. "Global economic growth cooled as the composite PMI slipped to 50.5 in September (Aug: 50.6), signalling the softest growth in the current eight-month sequence of increase."

4. ISM Services. Services PMI edged down to 53.6 (in line, prev 54.5) for the 9th consecutive month of expansion. New orders fell for the 9th straight month while prices paid remain elevated.

5. Factory orders. "August factory orders +1.2% m/m vs. +0.3% est. & -2.1% in prior month … orders ex-transportation +1.4% vs. +0.2% est. & +0.9% prior (rev up from +0.8%)."

6. ADP employment change. "September private payrolls rose by 89k vs. 150k est. & 180k prior (rev up from 177k); smallest gain since beginning of 2021."

7. ADP vs. JOLTS. "According to ADP, Professional and Business services jobs plunged 32K...JOLTS reported a 509K increase in Professional and Business Service job openings."

8. Wage growth. "Wage growth for job changers tumbled to 9.00% from 9.70%, the lowest since June 2021, and down from a peak of 16.4% last June."

9. Card spending. "Our credit-card spending data 'for the 16 sub-sectors we track show that total spending in Sept .. was -10.8% (-10.9% ex-food), which is the now weakest month of the year .. September marks the fifth consecutive month of spending deceleration.'"

10. National Financial Conditions Index. The NFCI "ticked up to –0.37 in the week ending September 29, suggesting financial conditions tightened."

11. US commercial petroleum inventories. "Inventories rose by 4.6 million barrels last week, driven overwhelmingly by a massive 6.5 MMbbl build in gasoline stocks, the largest build since Jan 2022."

See:

12. Gasoline demand. US implied gasoline demand (product supplied) is seasonally very weak.

13. Crack spreads. "Gasoline crack spreads back to the lowest levels since lockdowns...this is what we would expect in a supply-driven bull market."

14. US oil. WTI crude prices saw their largest drop since September 2022.

15. Central banks vs. gold. "Central banks added 77 tonnes to their gold reserves in August - the third consecutive month. This is a 38% up-tick from July’s buying, and suggests that we have now moved past the net selling we saw in April and May."

16. USD streak. "The Dollar Index (DXY) is in the middle of a massive rally. It has advance 11 straight weeks through last Friday (Sept 29).…This is the second longest streak on record after October 2014" [since 1973].

17. UST vs. JGB. The spread between 10-year US Treasuries yields over 10-year JGBs has topped 4% for the first time in 22 years.

18. TLT selloff. "In every case back to 2003, when long-dated Treasuries lost as much as they just have, they went on to stabilize and even rally over the next 100 days."

19. Large UST moves. "Over the last decade, the large moves to higher yields have been between 50-150bps and 2-3 months in duration."

20. MOVE. "The MOVE Index (the VIX of the bond market) is again back into rarefied air ... more than one standard deviation about its long-term average (above the shaded area). Take this as a sign that, again, the bond market is under a lot of stress."

21. Relentless talk. "We've reached the 'relentless' phase of the rise in yields. News articles mentioning that word and the bond market have spiked to the 2nd-highest in 8+ years. It was only higher once, which was almost exactly a year ago."

22. UST yield vs. SPX yield. "Yields on 10-year Treasuries are now almost equal to the trailing 12-month earnings yield on the S&P 500 index. This is the first time that's the case going back to 2002."

23. Excess pessimism. "The level of Excessive Pessimism is now below what was registered at the December 2022 and March 2023 lows."

24. CTAs vs. SPX. "Since mid-August, [CTA] positioning [in SPX]...has gone from +$45bn to -$26bn."

25. 52-week lows. "An increasing number of S&P 500 stocks are hitting 52-week lows."

26. SPY streak. "SPY has made lower lows on 33 of the last 50 trading days.  That's tied for the most in the ETF's history."

27. Nasdaq breadth. “% of stocks above their own 200d ma and 50d ma on the NASDAQ, overlaid as a histogram chart. We have an accumulation/correction zone and then we have an extreme oversold zone (buy now - hit 3 times over the past 5 years). We have entered the first of the two.”

28. Sector ETF breadth. "For the first time since early October last year, not a single sector ETF is trading above its 50-day moving average."

29. US vs. World. "Stocks for the World outside the US are now down for the year, according to FTSE.  The S&P 500 is still up more than 10%."

30. Earnings divergence. And finally, US “earnings expectations have risen steadily for the Nasdaq-100, dominated by mega-cap technology groups, even as they have plummeted for the small caps in the Russell 2000.”

Thanks for reading!