Daily Chartbook #331

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

1. Case Shiller. September Case-Shiller data shows home prices rose for the 7th straight month, increasing by 0.7% MoM (vs. +0.8% est) to 3.9% YoY (highest annual gain since December 2022).

2. House Price Index. "September FHFA House Price Index +0.6% m/m vs. +0.5% est. & +0.7% in prior month (rev up from +0.6%)."

3. Redbook. Redbook retail sales jumped 6.3% YoY (prev 3.4%) in the week ending Nov 25.

4. Richmond Fed Manufacturing. "Index down to -5 vs. +1 est. & +3 in prior month; new orders inched further into contraction; capex improved; wages stayed in expansion … employment fell sharply right to 0 (neither contracting nor expanding)."

5. Dallas Fed Services. The Dallas Fed Services Index improved but remained negative for the 18th consecutive month.

6. Consumer Confidence. "Consumer confidence rose 2.9pts to 102 but from a downwardly revised prior reading (prior revised down to 99.1 from 102.6)."

7. Consumer savings. At Regions Financial (which skews towards lower-income consumers), "consumer savings remain well above December 2019 levels by 44% on nominal basis at 9/30/23 ... However, balances are much closer to normalized levels when adjusted for changes in spending activity."

8. Financial conditions. "The nominal GS US Financial Conditions Index eased by 9.0bp to 99.85 over the last week, mostly due higher equity prices, lower BBB credit spreads, and a weaker dollar."

9. QT vs. reserves. Reserves are now higher than they were when the Fed began QT in June 2022.

10. Fed vs. SPX. "The Fed has run policy from a 'risk management' perspective for some time."

11. Fed funds futures. Futures imply a 34% probability of a 25bps cut in March, up from 14% a month ago.

12. Gold vs. SPX. "For the last 7+ years, the ratio of Gold/Stocks has bottomed at these relative levels. However, each rally (in favor of Gold) has gotten subsequently weaker."

13. Yield curve. "After a brief decline, the % of yield curve inversions has returned to extreme levels, now approaching 90% again."

14. VIX vs. MOVE. "The divergence between the MOVE and VIX index suggests that equity volatility could move higher from here."

15. Stocks vs. bonds. With $SPY / $TLT correlations at YTD highs, "equity markets are keenly focused on if and when long term yields will decline."

16. ETF flows. "Over past month, large- and mic-cap equity ETFs have accounted for 46% of inflows, down from 49% in prior week; government bonds showing less interest as well, but outflows weren't as high as in prior week."

17. Client flows. BofA "clients sold 6 out of the 11 GICS sectors, led by Health Care—three consecutive weeks of outflows."

18. Private client flows. "Private clients buying munis, Japan, dividend funds & energy, and selling HY, low-volatility, TIPS& materials past 4 weeks."

19. HFs vs. Energy. Hedge fund positioning in Energy stocks is near YTD lows.

20. Buybacks. "Corporate client buybacks decelerated the past week but are still tracking above seasonal levels for a third week in a row."

21. Insiders. The corporate insider buy-sell ratio jumped to a 6-month high (0.54) in November.

22. Overbought. "A considerable portion of the S&P 500 is treading in overbought territory, with about 17% of the index showing an RSI reading above 70. Although 17% may not seem exceptionally high, it represents a 91st percentile reading over the past decade."

23. Potential pullback. "While past performance not indicative future returns, it's not uncommon to see 3-4% pullbacks after the rally we just witnessed (+10%)."

24. Cost to hedge. "Rolling SPX 1 month 3% OTM put cost ... current cost is 34 basis points ... this is the lowest level in 5 years."

25. Upside vs. downside. "Upside remains a larger risk than downside."

26. Implied correlation. "Despite the fact that index concentration is near the highs, index implied correlation is at all-time lows."

27. Stocks vs. recessions. "Recessions have historically been painful for stocks and hardly discounted in advance."

28. EPS revisions. “Accelerating EPS downgrades have a very high probability of leading to equity market draw-downs and defensive sector & style rotations.”

29. New highs vs. new lows. "For the first time in 16 weeks, last week had more stocks making new highs than new lows. In bull markets of the past, NH > NL was the rule not the exception."

See:

30. USD peak. And finally, “here's how things have been going since the US Dollar peaked October 3rd. The new 52-week lows list on the NYSE also peaked that day.”