Daily Chartbook #86

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 petroleum levels. "BIG US commercial oil inventory draw this past week. Total petroleum stocks fell by 6.5 MMbbl w/w, which was the largest decline in 7 weeks. Crude, specifically, fell by a whopping 5.4 MMbbl, the largest draw in 13 weeks".

2. Strategic Petroleum Reserves. US SPR "moved down for the 62nd consecutive week to its lowest level since 1984. The 34% decline in reserves this year is the largest on record by a wide margin".

3. Oil prices outlook. Bernstein expects Brent oil prices to stay within the $100 range in 2023.

4. Homebuilder confidence plummets. "The US Housing Market Index (measure of homebuilder confidence) fell for the 11th consecutive month to its lowest level since April 2020.".

5. Future home sales. "A measure of future sales slid 4 points to 31, the lowest in a decade, while indexes of current sales and prospective buyer traffic weakened to the softest levels since April 2020".

6. Deflatometer. "This chart tracks the proportion of countries who are seeing a negative annual rate of change in their stockmarket (along side the same for forward earnings, and industrial production)".

7. Credit card balances. Yesterday, we noted the record rise in credit card balances, "the reality is that credit card balances came down dramatically in 2020 and early 2021 and the 2022 comps are skewed by that fact".

8. Food prices. "After two years of large annual price increases, the FAO food-price index is about to post its first year-on-year percentage drop".

9. Inflation in 2023. "BofA expects US CPI to be driven more by core services in 2023, with food and energy falling".

10. Retail sales (I). Retail sales jumped by 1.3% in October (vs. 1% expected) for the biggest increase since February.

11. Retail sales (II). Month-over-month breakdown.

12. Retail sales (III). Month-over-month breakdown, visualized.

13. Retail sales (IV). However, "after adjusting for inflation, the story changes. Real Retail Sales peaked in March 2021 & are down 0.3% over the last year".

14. Import, export prices continue decline. "Import prices fell reflecting fuel, consumer goods, and foods that more than offset increases in cars and capital goods. Export price declines were concentrated in agricultural goods, industrial supplies, and cars".

15. Industrial production drops. "US Industrial Production unexpectedly fell 0.1% MoM in October - the biggest drop since Dec 2021 and less than the expected 0.1% MoM jump. That is the 4th monthly decline in the last 6 months and the slowest YoY rise since January".

16. Capacity utilization surprises. The capacity utilization rate surprised to the downside, falling just below 80% (79.9%).

17. No recession? From Goldman Sachs: "US Likely to Avoid Recession. .. the incoming activity data are nowhere close to recessionary".

18. Q4 GDP. Atlanta Fed's GDPNow estimate for Q4 has increased to 4.4%.

19. Historic inversion. "Steepest U.S. yield curve inversion since 1982: US 2-year yields are now nearly 63 basis points above rates on 10-year notes".

20. US2Y shorts. "Net short positioning in the 2-year at a record high"

21. Stocks vs. bonds (I). "The trailing 6-month correlation of daily returns of the S&P 500 and the S&P U.S. Treasury Bond Current 10-Year Index has reached 0.3, the highest level in decades".

22. Stocks vs. bonds (II). "The 2-year rolling correlation between stocks and bonds has risen to its highest level in 24 years".

23. Risk-off. Net speculative positions among asset managers remain extremely depressed.

24. EPS drawdowns (I). "The average drawdown in trailing EPS in a recession has been 19% since 1945".

25. EPS drawdowns (II). "The market tends to trough when real earnings are 6% below trend (which would imply EPS falls by 18% in real terms from current levels)".

26. AAII sentiment. "More bulls than bears for the first time since early September, but bulls, bears and the spread between them all remain within recent ranges".

27. Buybacks & dividends outperform. Shares of companies spending cash on dividends and buybacks are outperforming that of those focused on Capex, R&D, and M&A.

28. CEO confidence vs. profits. And finally, ultra-low CEO confidence suggests lower profits ahead.

Thanks for reading!