Daily Chartbook #57

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

1. Foreign reserves drawdown. Global foreign-currency reserves have fallen by 7.8% (~$1 trillion) in 2022, the fastest pace on record.

2. Container rate drop accelerates. "The ocean container rate collapse continues to accelerate and has fallen another 10% in the past 2 days." China to the North American West Coast "is now "down 86% since the start of the year".

3. Tight financial conditions (I). Jefferies' US financial conditions are near Great Financial Crisis levels.

4. Tight financial conditions (II). "Financial conditions have tightened and are near peaks observed over the past three decades".

5. Recession vs. Bankruptcies. A lot of stories written about "recession" but not as many about "bankruptcies" as in previous periods.

6. 1982. "With 3Q2022 GDP estimates back in positive territory, worth looking at 1982, during which there were 2 neg. quarters of GDP (NOT the definition of recession), followed by a positive quarter, then a shift back down".

7. Jobless claims jump. Initial jobless claims rose by 29,000 to 219,000 (vs. 203,000 expected).

8. How do I put this… Google searches for "how to ask for a raise" spiked in 2021 and have remained at elevated levels.

9. AAII bulls & bears. "AAII bears dropped below 60% for first time in three weeks, but it's still 27 weeks in a row of bears > bulls".

10. NAAIM. The active investment managers' exposure index moved up to 38.11 from 12.61 a week ago. "Nothing like price to change sentiment" - Helene Meisler

11. Retail army retreats. "Retail traders were net sellers for the second week in a row", selling $1.1 billion over the past week. "The last two weeks represented the worst selling in single stocks [shown below] since March 2020."

12. BTFD? Buying the dip ain't what it used to be.

13. Cross-asset correlations. "So far, the S&P 500 remains inversely correlated with  the US dollar and positively correlated with US 10-year bonds".

14. VIX vs. MOVE. "Rolling 1y correlation between equity & bond volatility (VIX & MOVE, respectively) dipped last year but has since picked up; not back to prior crises levels, but above longer-term avg leading up to pandemic".

15. Margin debt. "Is the current 12-month z-score for margin debt a contrarian bullish signal for US stocks?"

16. Tax loss harvesting. From BofA: "Institutional client selling has typically peaked in Oct, private client selling in Dec".

17. Gold shorts. CTAs and money managers are net short gold.

18. Guidance reductions are up. "The net percentage of S&P companies reducing sales & EPS guidance are in their 90th percentiles".

19. Q3 earnings growth (I). "Earnings growth is expected to dip well into the negative territory at -4.2% YoY excluding the more volatile Energy and Finance sectors".

20. Q3 earnings growth (II). "The highest 3Q-22 earnings growth (+6.1%) is expected for the more domestic issuers".

21. Recession P/E vs. EPS. "Earnings typically continue to fall but P/E stabilizes after a recession start."

22. Compressed high-growth valuations. "Median EV/sales for high-growth stocks has fallen below long-term average".

23. Timing the market. "Once again the crowd loaded up on puts at local market lows."

24. Hard(er) landing. Goldman has cut its hard landing forecast for the S&P 500 to 3150 from 3400.

25. Big number tomorrow. And finally, with jobs numbers due tomorrow morning, “over the last 25 years, September has failed to beat NFP consensus 76% of the time, the worst downside surprise track record for any month. If we come in below consensus of 250k (could possibly be negative), the Fed Pivot trade could go into overdrive”.

Thanks for reading!