August 9, 2023

Market Performance (YTD)

Source: YCharts
Disclaimer: Past performance is no guarantee of future performance

There has been an absolutely wild divergence in macro data surprises in the past few months and I am old enough to know that there is no such thing as decoupling… pic.twitter.com/GwE5BIMpkH

— Julia Coronado (@jc_econ) August 2, 2023

Key takeaways from July job report:

1) The economy is humming
2) Job growth is slowing, but solid (+187k jobs now vs. +399k avg. last yr)
3) Service sector is hiring (health, social)
4) Women have done so well they make up 49.9% of workers (!)
5) Wage growth +4.4% y/y is well… pic.twitter.com/jeG0GfdQPW

— Heather Long (@byHeatherLong) August 4, 2023

6th consecutive month of negative Nonfarm Payroll revisions (bottom panel). That's occurred twice before: in 2H 2007 and 1H 2002. #hopE pic.twitter.com/4rtC5gBPv1

— Kantro (@MichaelKantro) August 4, 2023

Nothing pointing to an imminent recession in today's jobs report, but the housing industry lost 5,500 residential construction jobs.

This is the worst monthly jobs loss post-COVID.

At that pace, we should be on recession watch next summer (8% drawdown). pic.twitter.com/b8dQJXqGVx

— Warren Pies (@WarrenPies) August 4, 2023

Market-implied inflation expectations over the next 5-10 years have risen to the highest levels in more than a year. Traders are starting to game out a future with sustainably higher inflation and higher long-term bond yields. https://t.co/AX0CQH7Ox3 pic.twitter.com/bP2WVhAWfi

— Lisa Abramowicz (@lisaabramowicz1) August 7, 2023

Real yields on 30-year Treasuries have surged to the highest levels since 2011. pic.twitter.com/yjXFb0Emvr

— Lisa Abramowicz (@lisaabramowicz1) August 4, 2023

Can oil hold above $80? Since falling below $80 in late 2022, that area has served as resistance in 2023. Crude got near or a bit above it on five separate occasions before falling once again. Will this time be different? pic.twitter.com/2Qj15bM6Bz

— Liz Young (@LizYoungStrat) August 3, 2023

The 2-10 yld curve has steepened by 35 bps since July

Most of the steepening has been due to the 10-year rising (bear steepener)

Bear steepeners are rare and usually occur at two distinct points of the cycle:
1) Heading into recession (inverted YC)
2) New expansion (pos YC) pic.twitter.com/ZHsGqtt3y3

— 3Fourteen Research (@3F_Research) August 6, 2023

$AAPL worst 2-day performance in 9 months.

SPX is cool with that. pic.twitter.com/XAJthARHvX

— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) August 7, 2023

This failed breakout from the Tech sector is a problem pic.twitter.com/AfIeLDr018

— Austin Harrison, CFA, CMT (@meanstoatrend) August 7, 2023

BI Market Pulse Index has pushed to manic levels — an early sign that the equity rally might be getting a bit overheated and due for another consolidation phase. The last time the index hit manic was Jan 2023. pic.twitter.com/MKuYJADWqA

— Gina Martin Adams (@GinaMartinAdams) August 2, 2023

Here's how the trend of Nasdaq 100 / Russell 2000 has evolved since the 2000 bubble.

Interesting. pic.twitter.com/0HKDAyZPsJ

— Koyfin (@KoyfinCharts) August 4, 2023

At 40x trail 12m sales, 25x fwd sales, Nvidia is highest valuation stock of any stock in top 500

Odds it out-performs now? 231 companies reached similar multiple last 50+years

Only 20% beat market next 12m.
>90% fail 3/5/10 years.
Median stock loses by 36% next 12m.
🧵👇 pic.twitter.com/ObSjLzuppD

— Jeremy Schwartz (@JeremyDSchwartz) July 28, 2023

The Odds Are Stacked Against You

At a 40x trailing and 25 expected Sales, NVDA joined the club of 99 companies with highest P/S multiple within 500 largest stocks in last 60 plus years.

Some stats on winners /losers from these 99 companies that became THE highest multiple stock… pic.twitter.com/2QC7bi9GDG

— Jeremy Schwartz (@JeremyDSchwartz) August 3, 2023

Disclosure
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