Daily Chartbook #37

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

1. EIA weekly report. US crude oil, total motor gasoline, and total distillate fuel oil stock levels (for week ending September 2).

2. Mortgage rates. Rates hit their highest level since 2008 at 5.89% for a 30-year fixed mortgage. "The 3% spike in mortgage rates over the last year is the largest 1-year increase we've seen since 1980-81".

3. Beige Book. The number of times "shortage" was mentioned increased in the latest Beige Book report.

4. DXY. "The [dollar] index is 9% above its 200-day, a feat it has achieved only once before this century in 2015"

5. Autos (I). Wholesale used vehicle prices declined by a substantial 4% in August and are now down 9% over the last 6 months. They are still up 8.4% YoY.

6. Autos (II). "Luxury cars, pickups, SUV prices are up less than overall CPI YoY".

7. Labor market. "This week initial claims declined another -6,000 to 222,000, and the 4 week average declined -7,500 to 233,000. Continuing claims, which lag somewhat, increased another 36,000 to 1,473,000, a 5 month high".

8. Employment projections. From BLS: "Total employment is projected to increase from 158.1 million to 166.5 million and grow 0.5 percent annually, which is slower than the 1.0 percent annual growth recorded over the 2011−21 decade".

9. Fintwit vs. Consumers. Twitter is less pessimistic about the economy than Michigan survey respondents.

10. Financials pricing a recession. From Deutsche Bank: "Financials completely skipped the rate hiking cycle and have directly priced in a recession".

11. Recession pricing. Equity markets typically start pricing in a recession ~7 months before they actually begin.

12. Value over the last 6 recessions. Value stocks typically begin outperforming relative to growth stocks around the start of a recession.

13. Recovery time (I). Bear markets typically bottom ~9 months ahead of the recovery in corporate earnings.

14. Recovery time (II). "On average the market starts to recover just before 2-year rates start to fall…and typically not until the fed funds rate has peaked."

15. AAII sentiment (I). Sentiment has dropped sharply over the last month.

16. AAII sentiment (II). The bull-bear spread is nearing extreme levels again.

17. NAAIM. The National Association of Active Investment Manager's Exposure Index dropped to 27.3 from 32.4

18. Flows (I). "Retail flows into US securities have been declining."

19. Flows (II). Sticking with retail, "with the outsized buying over the prior 2 years, the longer term (e.g. 12M flows) still have room to normalize further (right chart below)".

20. Company guidance. The Company Guidance Index "shows earnings outlook remains relatively solid for now (after dipping into negative territory not too long ago)".

21. Negative revisions ahead? September and October are not typically forgiving when it comes to earnings revisions

22. Buybacks (I). Buyback announcements have remained strong this year.

23. Buybacks (II). But "buybacks as a share of profits are still low."

24. Speculative assets. The segments of the market that enjoyed the biggest gains off the mid-June lows are getting hit hard now.

25. Tech vs. S&P. This chart shows a possible head and shoulders pattern for technology stocks relative to the S&P 500.

26. S&P valuations. "The spread between the most expensive and cheapest stocks remains wide vs. history".

27. Factor performance. "Dividend yield has been outperforming other equity factors."

28. Midterm bump. And finally, stocks have been higher a year after midterm elections every time since World War II.