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The Week in Charts | Charlie Bilello

The charts and themes from the past week that tell an interesting story in markets and investing…

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Comments

  • edited April 2023
    The Week in Charts (03/28/23)

    Covering the most important charts/themes in markets and investing, including the "Fed Put," the Steepening Signal, Blood in the Streets, and more...

    Blog Post
    Video
  • @Observant1, thank you so much for sharing Bilello’s blog and video, which will undoubtedly benefit this board.
  • Indeed. I'm only halfway, but his analysis seems very on point and dispassionate (something I value).
  • edited April 2023
    Good read. Don’t bet the farm on any particular point. Conventional wisdom. Wish the 10-year would get back up above 4% where I’d plunk a portion of cash back into GNMA. Just a hunch that that’s a more profitable (in & out) trade than at the current rate around 3.5%. Yes, short term rates have fallen dramatically in recent weeks.

    The insights into falling commodity prices are of interest (although precious metals / miners have surged this year). Suspect the commodity downturn is normal after a very heady period. Should level off. Checking 3 commodity related funds I’ve owned in the past (but no longer own) …

    1-Year Return3-Year Annualized

    PRAFX -11% …….… +19%

    PRNEX - 2% ……..… +26%

    BRCAX - 8% ……..…. +22%


    *Numbers (rounded) from MarketWatch
  • hank said, Don’t bet the farm on any particular point. Conventional wisdom.
    I concur. Now that majority of rate hike is behind us, there may be some short term trading opportunities in bonds. The bigger opportunities are the long bonds when recession arrives and the Fed will cut rates.

    The falling commodity prices from Bilelllo make sense as the economy is slowing (less demand). I moved on most of my commodity positions this year that yielded a modest gain. Precious metals moved up in recent weeks as the coming recession is realized. The inverted treasury yield curve remains and the spreads between 2mo-, 3mo-, and 6mo-10 yr have increased. The 10 yr yield keeps falling and it reached 3.48% as of 3/31/23.

    Labor data is coming next week.
    https://bls.gov/schedule/2023/04_sched.htm

    Tech stocks are moving up as if the Fed will pause and pivot this summer. IMHO it is a forgone conclusion that the Fed will cut rate this year unless we enter a bad recession. Still there are several possible scenarios that have yet to play out.

    In the meantime, I keep reading and positing myself defensively if and when the recession arrives.
  • Good article from Schwab that Tom Mandell linked

    https://www.schwab.com/learn/story/why-go-long-when-short-term-bonds-yield-more

    Recommends intermediate bonds

    Authers at Bloomberg has a very interesting article pointing out that the hopes that bank crisis will precipitate Fed easing also seem to require recession. Not good for earnings!

    He thinks the potential for that scenario is overdone, and the Fed could continue to raise rates to control inflation while continuing QT.

    "In the short term, the risks are that markets will continue to shift away from the position of the last few weeks, and perhaps begin to put some credence in the Fed’s claim that it won’t be cutting rates this year. A barrage of data that is about to hit for the beginning of the month should enlighten us further. While the banks’ crisis might not hurt economic activity that much, tighter money can be expected to have a big effect, with a lag. The most important place to look for that could be the corporate sector.

    As Torsten Slok, chief US economist of Apollo Management, shows in this chart, capital expenditures (capex) have started falling. That can be expected to have a negative multiplier effect over time, which would be good for defeating inflation, but not so great for economic activity, or corporate revenues and profits:

    And on the subject of profits, the latest National Income Profit Accounts data, compiled as part of the process of calculating gross domestic product, came out last week. This is a measure of corporate profits that eschews the smoothing that goes with the GAAP accounting used to publish companies’ accounts. They’re typically published, as below, with adjustments both for inventory valuation (IVA) and capital consumption (CCAdj). Over time, NIPA profits and S&P 500 GAAP profits do tend to move roughly together, because there are limits to the creative accounting that companies can do. But in the short term they can differ. It’s therefore not a great sign that NIPA profits took a dip in the final quarter of last year:

    There are reasons for concern about the remaining three quarters of this year, many of which are not yet reflected in market pricing. For now, however, it looks as though the damage done by the banks has been overpriced. Absent big surprises in the new data — or fresh external shocks like the Opec+ agreement to limit oil production that spurred a rise of 8% for Brent crude at the Asian opening — it’s best to brace in the near term for bond yields to rise from where they are now, while more speculative investments give up ground. "
  • edited April 2023
    The Week in Charts (04/07/23)

    A tour of the markets covering the most important charts & themes, including fears about our children's generation, a repricing of the housing market, the manufacturing recession, and more.

    Blog Post
    Video
  • edited April 2023
    The Week in Charts (04/15/23)

    A tour of the markets covering the most important charts & themes, including the global trend of lower inflation, the Fed predicting a recession, the consumer pullback, investors showing love for McDonald's, a bull market in auto parts, and much more.

    Blog Post
    Video
  • Thanks for posting. All the data are pointing to a slowing economy supported by the consumer spending habits. During the tech bubble in 2000-2002, consumers delayed buying new cars and kept up with maintaining their old cars, that benefited car part stores such as Auto Zone and Napa. The trend with McDonalds is similar.

    As an investor, consumer staples sector and other defensive sectors will do well if and when the recession arrives.
  • I follow Bilello at Twitter. He posts lots of his stuff there. https://twitter.com/charliebilello
  • edited April 2023
    Thanks @yogibearbull. I am just having hard time with Twitter and now with Elon Musk.
    Bilello's videos have lots of information and charts.
  • edited April 2023
    The Week in Charts (04/22/23)

    A tour of the markets covering the most important charts & themes, including Treasury bill problems,
    the housing shortage, rising recession risks, public pessimism, and more.

    Video
    Blog
  • The Week in Charts (05/02/23)

    A tour of the markets covering the most important charts & themes, including the First Republic freefall, the housing market standstill, the #1 reason for renting, and more.

    Video
    Blog
  • The Week in Charts (05/11/23)

    A tour of the markets covering the most important charts & themes, including a potential end to the Fed's rate hikes, why the inflation rate is set to decline even more, a return to prosperity, and the sentiment gift that keeps on giving.

    Video
    Blog
  • The Week in Charts (05/20/23)

    A tour of the markets covering the most important charts & themes, including the Nasdaq 100 comeback, the inverse of 2022, US equity valuations, the US Consumer pullback, and more.

    Video
    Blog
  • Thanks. Lots of good information.
  • The Week in Charts (06/01/23)

    A tour of the markets covering the most important charts & themes, including the AI Mania, Buying vs. Renting, the Sneaker Slowdown, the Travel Boom, and more.

    Video
    Blog
  • The Week in Charts (06/11/23)

    A tour of the markets covering the most important charts & themes, including an increase in bullish sentiment, the enormous eight, a June pause, the jobs comeback, and more...

    Video
    Blog
  • The Week in Charts (06/18/23)

    A tour of the markets covering the most important charts & themes, including the best start to a year since 1997, the long awaited pause, downward inflation trends, and much more.

    Video
    Blog
  • edited June 2023
    The Week in Charts (06/25/23)

    A tour of the markets covering the most important charts & themes, including the $32 trillion debt milestone,
    the Housing Shortage, the Downtown Downturn, and more...

    Video
    Blog
  • 3 years ago: 30-yr mortgage rate was 3.13% & median existing home price
    in the US was $284k.
    Today: 30-yr mortgage rate is 6.67% & median home price is $396k. Result: $22k increase in down payment (assuming 20% down) and 109%
    increase in monthly payment (from $973 to $2,037).
    No wonder this impacts the affordability of the buyers. For sure the wage increases in the last 3 years don’t amount to 109% higher. If and when the recession arrives, the home sale situation would slow even more.
  • The Week in Charts (07/08/23)

    A special edition of The Week in Charts.
    10 surprises from the first half of 2023...

    Video
    Blog
  • edited July 2023
    and macro droll : dude, where’s my recession?

    https://www.nytimes.com/2023/07/11/opinion/us-recession-yield-curve.html
  • edited July 2023
    So here's today's chart of interest, courtesy of The New York Times:

    image

    Looking pretty much the way that Krugman has been saying...
  • edited July 2023
    The Week in Charts (07/16/23)

    A tour of the markets covering the most important charts & themes, including the persistent decline in inflation, active managers getting bullish again, the manufacturing construction boom, the mortgage predicament,
    and more.

    Video
    Blog
  • The Week in Charts (07/24/23)

    A tour of the markets covering the most important charts & themes, including the increase in bullish sentiment, multiple expansion and higher earnings expectations, the upcoming FOMC meeting, and more...

    Video
    Blog
  • The Week in Charts (07/31/23)

    A tour of the markets covering the most important charts & themes, including the 11th Fed hike,
    an epic run in the Dow, active managers going leveraged long, and more...

    Video
    Blog
  • The Week in Charts (08/08/23)

    A tour of the markets covering the most important charts & themes, including asset class performance through July, the slow normalization in the jobs market, why inflation is likely to rise, and much more.

    Video
    Blog
  • Thanks @Observant1 Always some interesting tidbits here and there.
    Remain curious,
    Catch
  • The Week in Charts (08/15/23)

    A tour of the markets covering the most important charts & themes, including...
    00:00 Intro
    00:29 The Streak is Broken (Inflation Report)
    05:10 The Road to Prosperity (Real Wage Growth)
    07:57 US vs. Europe (Inflation Rates/Monetary Policy)
    09:42 A Tale of Two Cities (The Upside/Downside of Higher Rates)
    14:11 A Fiscal Imbalance (Government Spending /Tax Revenues)
    19:35 This Wasn't Supposed to Happen (Rising Rates/Multiples)
    23:15 A Big Shift in US Trade (China Falls to #3)
    28:14 Refilling the Reserves? (SPR)
    30:05 New High in Residential Real Estate
    32:13 Incremental Progress

    Video
    Blog
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