Daily Chartbook #80

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

1. Winter is coming. "The volume drop at US ports is not a "blip", it is the start of a much steeper decline...The current volume drop in US container imports that is showing at US ports is going to get worse".

2. Transcript election talk. "The number and percentage of earnings calls in which the term ‘election’ has been cited in advance of the 2022 midterm elections are slightly lower than recent midterm elections".

3. Small businesses (I). "Small Business Optimism Index moved down to 91.3 vs. 91.4 est. & 92.1 prior; outlook (orange) dipped as well but remains off cycle low (for now) … hiring plans eased while expectations to boost compensation moved higher".

4. Small businesses (II). "No change and no surprise here: single most important problem for small businesses is still inflation, per October NFIB update".

5. Small businesses (III). From Wells Fargo: "Even as firms struggle with supply issues, a net zero percent of respondents reported inventories being too low".

6. Credit cards. "US credit-card balances surged to a record in the third quarter".

7. Revolving credit. “Americans are increasingly turning to their credit cards as they balance rising prices and strong demand for goods and services…Revolving credit...increased at an annual rate of 8.7% to $1.162 trillion in September...the highest level on record".

8. US Chapter 13. "Bankruptcy filings are ticking up".

9. 2-yr-5-yr spread. "Two-year Treasuries yield 0.33 pct points more than 5-years, an anomalously large spread. History back to 1985 shows that every time this happens 2-years/Fed rate policy is at a peak".

10. MOVE vs. VIX. Treasury volatility (MOVE) has significantly outpaced stock volatility (VIX) this year.

11. No rush. From Morgan Stanley: “Essentially it is not until roughly 22 weeks, or 5.5 months after the final hike, that the S&P500 Index's median return exceeds 5%”.

12. Weakening dollar (I). "The dollar seems to have lost momentum even as Treasury yields resumed their grind higher last week".

13. Weakening dollar (II). "The dollar has weakened the most over the past three sessions since March 2020". Does not include today.

14. Low liquidity. "This remains an extremely illiquid market, which means that moves can and likely will be exaggerated in both directions".

15. Resilient cumulative flows. Cumulative global “flows into US equity funds remain strong”.

16. Investor flows. "Investors have shifted back towards risk, with ~45%% of ETF inflows concentrated in large-/mid-cap & broad equity funds over past month; only 7% of flows have been into U.S. government bond funds".

17. Equity outflows. "Last week, during which the S&P 500 was -3.3%, clients sold US equities for a second consecutive week (-$4.8B), the largest weekly outflow since April ‘21".

18. Exposure plans. Investors say they are looking to increase equity exposure.

19. Risk appetite. "The Risk Appetite Index from S&P Global’s Investment Manager Index (IMI), fell from +3% in October to 0% in November with investors now split on their general attitude towards investing in the next 30 days".

20. Degrossing. "Hedge funds that make both bullish and bearish equity wagers are 'degrossing,' unwinding bets at a rate that was in line with the fastest this year, according to data compiled by [JPMorgan] prime broker using a 20-day rolling window".

21. Puts vs. calls. "3 months equity calls are now as expensive against puts as they were in late March 2020".

22. Gold is back? "Gold breaking out just weeks after financial media claimed the metal was dead".

23. Q3 earnings (I). "Earnings surprise was +1.4%, positive but below +3.7% preCovid average. In contrast revenue surprise was a strong +2.4% – well above +0.7% average".

24. Q3 earnings (II). "Excluding the volatile Energy and Finance sectors earnings instead declined -4.3% YoY on a +7.7% YoY increase in revenues".

25. Growth vs. Inflation (I). Only energy, industrials, and real estate earnings growth are keeping pace with inflation.

26. Growth vs. Inflation (II). "Just 3 sectors – Energy, Industrials, and Consumer Discretionary – are expected to post higher revenue growth than Q4 inflation. Real Estate is close, at 7.2 percent expected top line growth".

27. Next year. And finally, “the third year of a presidential cycle tends to be the most bullish for US equity markets”.

Thanks for reading!