Daily Chartbook #78

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

Note: #7 in yesterday’s newsletter contained the incorrect chart. It has since been corrected.

1. Relief in global food prices. The United Nation's food price index has declined for 7 consecutive months (longest streak in 9 years) to its lowest in 9 months.

2. Slowdown talk. "Chatter about an economic slowdown on company earnings calls and related transcripts reached its highest level since the peak of the pandemic-recession in 2Q20".

3. US GDP. US real GDP forecasts from BofA: "growth to slow to 1.7% in ’22, from 5.9% in ‘21".

4. Nonfarm payrolls (I). "October nonfarm payrolls stronger at +261k vs. +193k est. & +315k in prior month (rev up from +263k)".

5. Nonfarm payrolls (II). One-month change breakdown.

6. Unemployment rate (I). "The US Unemployment Rate moved up to 3.7% in October, 0.2% higher than the September reading (3.5%) which was the lowest rate we've seen since 1969".

7. Unemployment rate (II). "What drove the change in the unemployment rate".

8. Hourly earnings. "US Average Hourly Earnings increased 4.73% YoY in October, the slowest growth rate since August 2021. This is the 19th consecutive month that inflation outpaced the growth in wages, a decline in prosperity for the American worker".

9. Participation rate (I). "Labor force participation rate ticked lower in October to 62.2% vs. 62.3% prior; female participation (purple) moved down to 56.7%; male participation (orange) unchanged at 68.1%".

10. Participation rate (II). "Unfortunate (but not yet game-changing) move lower in prime-age labor force participation rate".

11. Establishment vs. household survey. The more volatile Household Survey tells a different story.

12. Credit event (I). "A credit event drumbeat is going louder".

13. Credit event (II). "Much louder".

14. Liquidity drives returns. “Correlation between liquidity in the system and SPX return”.

15. China vs. S&P earnings. "Will the lack of China's money supply growth negatively impact US tech companies?"

16. S&P vs. US 2-year yields. "The average 12-month trailing earnings yield on the S&P 500 is the lowest it’s been vs U.S. 2-year yields since 2007".

17. Cash is king. Cash saw "inflows of $62.1 billion in the week through Nov. 2" as investors rush into the asset class at the fastest pace since the pandemic.

18. Gold outflows. Gold is experiencing its longest outflows streak since 2013-2014.

19. One stock, please. Outside of the March/April 2020 period, stock "correlations are now at decade highs".

20. No computer chasing. "When it comes to CTAs chasing we need the market to trade higher before that flow kicks in (they actually flipped into light selling post yesterday)".

21. Wealthy investors. BofA's private clients’ cash levels are near their long-term average as they "continue to pour money into bonds but have topped-up equities holdings in past 2 weeks".

22. Bad start to November. "This November has been the 11th worst 3-day start to a month since at least late 1952".

23. Tech pain (I). The "ratio of tech sector relative to S&P 500 has fallen to lowest since June 2020".

24. Tech pain (II). "Info Tech has seen the most extreme combined selling vs. all other sectors on a 3m view, in line with sharp underperformance for the sector".

25. Big tech vs. small value. "Big tech underperformance vs small cap value…secular stagnation to secular stagflation".

26. Q3 earnings update (I). Of the 85% of S&P 500 companies reported, "70% have reported actual EPS above estimates, which is below the 5-year average of 77% and below the 10-year average of 73%".

27. Q3 earnings update (II). The blended "earnings growth rate for the third quarter is 2.2% today, compared to an earnings growth rate of 2.1% last week and an earnings growth rate of 2.7% at the end of the third quarter (September 30)".

28. Q3 earnings update (III). "In terms of revenues, 71% of S&P 500 companies have reported actual revenues above estimates, which is above the 5-year average of 69% and above the 10-year average of 62%".

29. Q3 earnings update (IV). "The blended revenue growth rate for the third quarter is 10.5% today, compared to a revenue growth rate of 9.3% last week and a revenue growth rate of 8.7% at the end of the third quarter (September 30)".

30. Earnings outlook. And finally, analysts expect negative YoY earnings growth of -1% in Q4 (5.6% for CY2022). Beyond that, earnings and revenue growth estimates for CY2023 are at 5.9% and 3.4%, respectively.

Have a great weekend!