Daily Chartbook #298

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1. PC shipments. Global PC shipments fell 9% YoY in Q3, but... "There is evidence that the PC market’s decline has finally bottomed out."

2. Worker strikes. "420,000 US workers have gone on strike in 2023. The number could rise to 545,000, a 40-year record, if the UAW strikes expand."

3. Credit card rates. "Interest rate for commercial bank credit cards continues to soar .. now at an all-time high."

4. Student loans. "Only 24% of student borrowers surveyed say they can make their full monthly payment without reducing spending."

5. Small Business Optimism. The NFIB Small Business Optimism Index declined more than expected, falling to a 4-month low at 90.8.

6. Inflation expectations. One- and three-year consumer inflation expectations ticked up, to 3.7% (from 3.6%) and 3% (from 2.8%), respectively. Five-year inflation expectations declined to 2.8% from 3%.

7. Financial conditions. Higher yields and a stronger USD pushed the GS US Financial Conditions Index to its highest in a year.

8. Q3 GDP. The Atlanta Fed's GDPNow model estimate for Q3 GDP growth increased to 5.1% from 4.9% on October 5.

9. US crude exports. "US crude oil exports reached a record high in first half of 2023."

10. Gold vs. Nasdaq. "Correlation between Nasdaq and gold is at historically elevated levels but at-risk of deterioration in a 'Goldilocks' backdrop."

11. Gold vs. real rates. "Rising real rates should keep gold price under pressure."

12. UST vs. DXY. "US Treasury yields are overshooting to the upside due to consistently strong economic data, and they are taking the dollar with them."

13. USD positioning. "The net long USD position from futures trades on the IMM is growing fast, approaching the extremes it reached in Autumn 2022."

14. UST positioning. Positioning in US Treasuries is still bearish.

15. Yields vs. last hike. "Bond yields always peaked post the final hike."

16. Stocks vs. bonds (I). "The elevated correlation between stocks and bonds is not limited to the tech-heavy S&P 500."

17. Stocks vs. bonds (II). "Government bonds are now as volatile as stocks."

18. Risk appetite. Investor appetite for bonds has surged in recent weeks.

19. Risky vs. Safe flows. Flows into Safe asset funds have been outpacing their Risky counterparts.

20. Investor flows. "Over past month, large and mid-cap ETFs have accounted for nearly 48% of inflows, down from nearly 62% last week; small-cap ETFs with outflows while government bond ETFs starting to pick up some of slack."

21. Client flows. Last week, BofA "clients were net buyers of US equities ($3.1B) for a 10th straight week (largest inflows since late Aug)."

22. HFs vs. Financials. "HF exposure to US Banks materially lower heading into Q3."

23. Small-cap balance sheets. "Within small caps in the US, companies with strong balance sheets...have begun to outperform very significantly in the last two months. This is what we might expect to see at a peak for Treasury yields."

24. Airlines vs. SPX. "Ratio of S&P 500 Airlines Index relative to broader market right back to its pandemic low in May 2020."

25. Banks vs. SPX. "KBW Bank Index is trailing broader S&P 500 by more than 37% YTD … by far worst spread in history."

26. Defensives internal destruction. "Internal destruction among defensive sectors (Staples, Health Care, Utilities) is now on par with: Black Monday panic, '94 bond market panic, Internet bubble panic, Post-Enron panic, GFC panic."

27. VIX vs. SPX selloffs. "The $VIX has always closed above 20 when the S&P 500 has sold off 7.8% or more…until today. The $VIX has only climbed to 19.78 in this drop, its smallest reaction on record to a stock drop this sharp."

28. Equal-weight P/E vs. yields. "Even taking out Tech impact, equal weighted SPX, which is down 1% YTD, is still showing a gap with real yields."

29. EPS estimates vs. yields. "Rising 10-year Treasury yields killed the US stock rally in August/September, not downward earnings estimate revisions. Lower yields now, if they persist, should push stocks higher."

30. Q4 rally? "When the S&P 500 falls more than 3% in September, but is still higher for the year going into October, a bounce is quite likely."

Thanks for reading!