Daily Chartbook #84

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

1. Homebuyer outlook (I). "Worst home buying conditions in history".

2. Homebuyer outlook (II). "Americans increasingly say they have no intention of moving in the coming year".

3. Labor market outlook. "We expect payroll gains to average 71k per month on average in 2023, troughing at 50k/month in the middle of the year".

4. Global GDP forecasts. The downside scenario for 2023 according to Bloomberg Economists forecasts would erase ~$5 trillion in global output.

5. Surprise. "Worth noting that Citi Inflation Surprise Index for U.S. has been moving up since August".

6. Inflation forecast. "We forecast inflation to remain uncomfortably high for a while; hiking for longer could become the Fed's path of least resistance".

7. Inflation expectations rise. One-, three-, and five-year expectations increased to 5.9% (from 5.4%), 3.1% (from 2.9%), and 2.4% (from 2.2%), respectively.

8. Recession not priced in. "Jefferies notes that a recession is not yet priced in, citing only 7% EPS cuts this far vs. 37% EPS cuts in the last three recessions".

9. Light positioning. Goldman's Sentiment (read: positioning) Indicator moved back down into negative territory.

10. Energy inflows. Energy funds have seen 5 consecutive weeks of inflows.

11. Hedge fund energy activity. "Energy was the most net bought sector among HFs over the prior two weeks (10/24-11/4)...However, HF flows again turned negative this past week".

12. Commodity bulls. "We are in the early innings of a new commodity secular bull market…Historically, equities enter secular bear markets during commodity bulls".

13. Copper stagnation. "Goldman currently sees a period of significant stagnation in copper supply growth".

14. Silver vs. commodities. "Silver has so much catch up to do".

15. Yield curve inversions. "100% of all US (Treasury) yield curves are now inverted as of Friday. The last time this happened was in 1980".

16. Nasdaq YoY drawdowns. Current levels of change in the Nasdaq YoY suggest a sharp reversal ahead.

17. Call options surge (I). "Total call options volume hit the highest level of the year on Friday--and one of the highest levels since the Jan 21 meme mania".

18. Call options surge (II). "Over the last 2 days, net call option volumes swung from extreme negative to positive, with the absolute change in the top percentile over the last 25 years".

19. Panic/Euphoria. "CITI indicator show not even the smallest hint of neither panic nor euphoria".

20. The Euphoriameter. But the Euphoriameter index "ticked up slightly in October off of the lowest point since 08/09. Contrarian bull signal?"

21. Megacap vs. S&P (I). On an enterprise value-to-sales basis, megacap valuations are still 2x that of the S&P 496.

22. Megacap vs. S&P (II). "Mega-cap tech 2022E sales growth of 8% trails S&P 500 growth of 13%".

23. Q4 EPS estimates. Analysts now expect negative YoY EPS growth of 0.39% in Q4, down from 6% just 3 months ago.

24. EPS downside (I). Mike Wilson "anticipates companies won’t be able to pass on price increases in coming quarters. While he says stocks may continue to rise in the next few weeks, the market’s ultimate bottom won’t come until 2023".

25. EPS downside (II). "After what's left of this current tactical rally, we see the S&P 500 discounting the '23 earnings risk sometime in Q123 via a ~3,000-3,300 price trough. We think this occurs in advance of the eventual trough in EPS".

26. S&P 500 price targets. And finally, "while our year end 2023 base case price target of 3,900 is roughly in line with where we're currently trading, it won't be a smooth ride. In short, we expect a bust before a boom, and it comes down to earnings".

Thanks for reading!

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MONDAY BONUS: Cheat sheet. Global markets week in review.