Daily Chartbook #305

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1. Homebuyer demand. Redfin's Homebuyer Demand Index is at its lowest level in nearly a year.

2. Existing home sales (I). "September existing home sales -2% m/m vs. -3.7% est. & -0.7% prior … level (blue) now at lowest since October 2010."

3. Existing home sales (II). "The national median existing-home price rose 2.8% in September from a year earlier to $394,300."

4. Jobless claims (I). Initial jobless claims dropped unexpectedly, falling from 211k to 198k (vs. 212k est), the lowest since January. Continuing claims rose more than expected to the highest since July.

5. Jobless claims (II). "Initial jobless claims have plunged in recent weeks, falling below the average of 2022, 2019, and 2018 on a non-seasonal basis. Continued claims remain way above the average of the prior non-recessionary years."

6. Term premium vs. unemployment. "Analysis/forecast from [Bloomberg Economics] shows sustained 50bps increase in term premium would raise unemployment rate to 4.3% in 2024 and 4.6% in 2025; sustained 100bps increase would up it to 4.5% in 2024 and then 5.2% in 2025."

7. Card spending. "Retail ex-auto spending was down 1.1% y/y in the week ending Oct 14. Y/y total card spending per HH came in flat in the week ending Oct 14 according to BAC aggregated credit and debit card data."

8. Bankruptcy filings. New bankruptcy filings have been rising since early 2022.

9. Philadelphia Manufacturing. The headline index improved to -9 from -13.5 (vs. -7 est). New orders, shipments, and employment all flipped positive. Prices paid and received point to increasing prices overall.

10. CB Leading Index (I). "Leading indicators fall again, marking the 18th consecutive monthly decline."

11. CB Leading Index (II). "Underlying LEI components for September showing nearly all negative/flat except initial jobless claims. Pretty much sums it up, the U.S. jobs market has been resilient, keeping the economy from meaningfully deteriorating further."

12. Commodity prices. "Industrial commodity prices have broadly normalized into the range of the 2010s. Food-based commodity prices remain elevated relative to their 2010s range."

13. HY & IG volatility. "The CBOE has launched two new measures of implied volatility for IG and HY, and they show that credit vol has increased recently and remains above pre-pandemic levels."

14. HY & IG short interest. "Massive uptick in short interest for the LQD. Note the HYG stays at relatively elevated levels."

15. Cash = not trash. "The best-performing major fixed-income asset class in the world? US cash."

16. Cash vs. SPX. "For the first time this century, cash pays a higher yield in interest than the S&P 500 does in earnings."

17. DXY vs. UST. "DXY and US yields have moved consistently over the decades, unless when the Fed not credible or US exceptionalism."

18. ZEW vs. UST. "The ZEW survey respondents are increasingly pounding the table on their call that US longer term rates are headed lower."

19. US 10-year. "10-yr Treasuries continue to rise due solely to higher real yields (not inflation expectations). Assuming real yields go to 2 standard deviations above the long run mean, nominal yields should reach 5.2%. That’s not far from today & current momentum says they'll get there quickly."

20. China vs. US securities (I). "Chinese investors offloaded the most US bonds and stocks in four years in August...The bulk of the $21.2 billion of sales were in Treasuries and US equities."

21. China vs. US securities (II). "Chinese holdings of US Treasuries dropped again, sliding by another $16 billion to $805.4 billion, the lowest since 2009, and down a record 20 of the past 22 months!"

22. EM outflows. "October looks set to be the third month in succession of ever greater portfolio outflows from EM equities, on some measures reversing all inflows since the start of the year."

23. AAII sentiment. "Declines were seen for both bullish (-5.9%) to 34.1% and bearish (-1.9%) to 34.6% sentiment amongst investors."

24. Active managers. NAAIM Exposure Index jumped from 36.2 to 66.7, the highest since early August.

25. VIX streak. The VIX streak of consecutive closes below 20 ended today after 105 days.

26. Asset class returns x vol. "According to Oxford Economics, EM equities and US high-yield bonds are likely to deliver the highest returns over the next five years."

27. Small-cap vol. "Small-cap implied volatility is at the highest level since May."

28. Market cap vs. EPS. "The biggest dispersions are in Energy, Financials, and Tech."

29. Discretionary minus 2. "Consumer stocks look inexpensive when adjusting for behemoths Tesla and Amazon."

30. Global earnings growth. And finally, “there are signs of life for the global earnings cycle, with non-US estimates recovering alongside the S&P 500. For now, US stocks still dominate non-US stocks, but the earnings trend could change that.”

Thanks for reading!