Daily Chartbook #53

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

1. US asset classes valuations vs. history. Stocks and housing remain at historically elevated valuations.

2. Home prices vs. jobs. The sharp drop in year-over-year home prices suggests higher unemployment ahead.

3. Global output. Here's a look at contraction and expansion across global PMI survey data for July and August.

4. American productivity. "Productivity growth has been quite strong over past decade, but reopening of economy has coincided with a turn lower in nonfinancial and business sector productivity (opposite for manufacturing)".

5. Profits under pressure. Rapidly eteriorating CEO confidence points to a drop in corporate profits.

6. PCE (I). Personal core expenditures (PCE) and core PCE increased 0.3% and 0.6% (vs. 0.5% expected), respectively, led by gains in services.

7. PCE (II). PCE and core PCE are now up 6.2 and 4.9% YoY, respectively.

8. PCE (III). PCE YoY change with topline contributions.

9. PCE (IV). The same for the top 5 subcomponents—note the large drop in gasoline/energy over the previous 3 months.

10. Personal income & spending rise. Personal income and personal spending in August rose +0.3% (vs. +0.3% expected) and +0.4% (vs. +0.2% expected), respectively.

11. Spending categories (I). Consumer spending increased by $67.5 billion in August.

12. Spending categories (II). Percent changes of consumer spending across categories in August.

13. Spending categories (III). Spending on goods has declined for 2 months in a row.

14. Consumer savings. "The mountain of excess savings US consumers accumulated across 2020 and 2021 have provided the foundation for their spending power".

15. Disposable income. "Real personal income is on its longest stretch of negative growth in history".

16. Chicago PMI. Business activity in Chicago dropped sharply, falling to 45.7 in September (vs. 51.8 expected) for the first contraction since the start of the pandemic.

17. Q3 GDP. Atlanta Fed's GDPNow model estimate for Q3 GDP growth jumped to 2.4% today from 0.3% just three days ago.

18. Wake up, September has ended. This month was among the poorest of the poor.

19. October calendar. Here’s a look ahead at the calendar of economic events for October.

20. Asset volatility. “Global interest rate volatility is at the heart of wider market volatility - "the sheer level of uncertainty in the pricing of the risk-free rate which makes up the foundation of all risky-asset pricing". As long as this persists, all markets will remain volatile”.

21. Mulligan. The "S&P 500 Tech sector has now erased all gains since November 2020".

22. Utilities down. Utilities suffered their worst 20-day percentage change since May 2020.

23. Record Treasury ETF inflows. "Investors have bought $100 billion across Treasury ETFs this year, nearly *double* the previous annual record".

24. Q3 EPS cuts (I). "The Q3 bottom-up EPS estimate...decreased by 6.6%...from June 30 to September 29". During the past 5 years, "the average decline in the bottom-up EPS estimate during a quarter has been 2.3%".

25. Q3 EPS cuts (II). "Ten of the eleven sectors witnessed a decrease in their bottom-up EPS estimate for Q3 2022 from June 30 to September 29".

26. CY22 EPS cuts. “Analysts lowered earnings estimates for 2022 for [S&P 500] companies in 9 of 11 sectors during the 3rd quarter, led the Consumer Discretionary sector”.

27. Stocks vs bonds. The S&P is underperforming the US Bond Index YTD by the widest margin since 2008.

28. Streak of quarterly losses. The S&P 500 also just closed down for the 3rd straight quarter for the first time since the Great Financial Crisis.

29. Wiped out. Since November 2021, $32 trillion in stock market value has been erased.

30. On the bright side (for dollar-cost averagers)… And finally, "the larger the drawdown the better the outlook".

Have a great weekend!