Charts of the Week

Welcome to the first installment of Charts of the Week. I’ll share some of the charts that were on my radar of the last week and why they’re important. If you enjoy this content, please feel free to share it with others!

Semiconductor exports from Korea plummet in a sign that the global economy is slowing

Samsung forecasts a 96% drop in profits for Q1 2023, after failing to slow production as semi sales slowed

Bank of America spending data suggests that retail sales slowed in March, which was recently confirmed by economic data

General merchandise sales took the biggest hit in March, showing consumers pulling back from discretionary spending

Data from Bank of America suggests consumers that spent less on gas, department stores, home improvements, lodging, and ecommerce in March

Corporations have grown share buybacks and shrank CapEx since 2007

Share buyback authorizations are at their highest levels ever so far in 2023

Positioning data suggests hedge funds are aggressively short, similar to their exposure before Jackson Hole in August of 2022, when the market dropped significantly

Investors are moving money from the US into other markets and assets, including increasing exposure to Europe and China as well as money markets and Treasuries

Wage growth is slowing meaningfully, down to just 2% year-over-year, which is good news for inflation and bad news for the consumer

Speaking of inflation, when netting out shelter Core CPI looks much cooler and we should see some of the owner’s equivalent rent impacts on CPI level off in months ahead

Financial Stress is at the highest levels we’ve seen since the 2020 crash, and similar to what was observed during the Dot-Com Bubble Bursting

Be careful what you wish for: Fed cuts are often bearish

Since SVB’s failure we’ve seen lending standards tightening significantly, which is a likely precursor to a recessionary environment

The resulting contraction in lending is likely to slow economic activity by reducing demand and making business conditions more challenging

We are still early on in the “bear market lows” signal cycle, currently at the “credit tightens phase” and before any Fed cut

Equities tend to see deeper drawdowns during recessionary environments

Home prices are falling, and that is generally a recessionary precursor

A commercial real estate debt maturity wall is approaching, just as lending tightens, making refinancing more challenging

We see multifamily building sales falling the most since 2020, another sign of commercial real estate weakening

Total activity within commercial real estate has similarly fallen significantly

Last but not least, the relationship between major central bank liquidity and risk asset performance cannot be emphasized enough

Thanks for checking out our Charts of the Week! We hope you enjoyed it.