Daily Chartbook #36

Welcome back to Daily Chartbook: macro market charts, data, and insights pulled from various sources around the Internet by a solo retail investor.

1. OPEC. Revenues for OPEC members will grow ~50% from 2021 this year but are expected to decline in 2023.

2. SPR. "The US Strategic Petroleum Reserve back at its lowest level since 1984."

3. MBA Refinance. The mortgage refinance index decreased to 556.40 and is at its lowest since 2000.

4. MBA Applications. Mortgage applications declined for the 4th consecutive week. There have only been "10 positive readings since the beginning of 2022".

5. MBA Purchase. The purchase index fell to 197.80 and "is now only 8% above the pandemic low".

6. Affordability (or lack thereof). The monthly payment on a 30-year mortgage—with 20% down—for the average existing home is back at highs of $1,960 per month.

7. Home price expectations. Consumers expect home prices to fall over the next 12 months for the first time in 2 years.

8. Supply chain improvement. Global shipping rates continue declining.

9. Balance of trade. The US trade deficit narrowed to $70.6 billion in July. Exports and imports are up 21% and 16% YoY, respectively.

10. GDP estimates. GPD growth estimates for Q3 (blue) and Q4 (orange) "have been cut over past couple months and are relatively underwhelming for now".

11. Q3 GDP. Atlanta Fed's GDPNow estimate was slashed from 2.6% (September 1) to 1.4%.

12. Gold vs. Copper. "The gold-to-copper price ratio is [in] the neutral zone".

13. Fed funds futures implied rate. Markets are expecting interest rates to stay higher for longer.

14. Treasuries rally. "The 1-Year, 2-Year and 3-Year US Treasury yields are at their highest levels since 2007 and 2008."

15. Supply-driven inflation. Commodities and small businesses' price plans point to lower CPI.

16. ISM & positioning. Based on the strong correlation with ISM manufacturing (67%) discretionary investor positioning is light.

17. Large outflows. From BofA: "Last week, during which the S&P 500 fell 3.3%, BofA Securities clients were net sellers of US equities (-$1.9B) for a third straight week (largest outflows since June)".

18. Smart money. "22% of large-cap active managers have outperformed the S&P 500 yoy".

19. Bearish positioning. Massive short positions are not showing signs of letting up.

20. Downgrades. "Analysts’ earnings downgrades have exceeded upgrades for 13 weeks in a row."

21. EPS trend. As a reminder, S&P earnings have been running hot for some time now.

22. ERP (I). "The S&P 500 Equity Risk Premium is near post GFC lows".

23. ERP (II). TINA (There Is No Alternative) to US equities.

24. DXY and SPX. With the dollar near its highest levels in more than 20 years, here's a chart showing the S&P's (red, inverted) tight correlation with the USD (blue).

25. DXY and EPS. This chart shows the strong correlation between a rising dollar (blue) and negative earnings revisions (red).

26. Oversold. "The last two times the market was this oversold was the COVID Crash and the Great Financial Crisis."

27. Growth vs. Value. On a PEG basis, growth stocks are expensive relative to value stocks.

28. Record panic. And finally, “last week’s panic hedging was 3x more extreme than in 2008”.