Weekly Chartfest

US economic data:

Ism non-manufacturing came in at 55.3 vs 55.8 est., up slightly from 53.9 prior.

Durable goods +4% y/y.

Should You Go All In On Water Like Michael Burry?

Water investments? Michael Burry was one of the first institutional investors to bet against the US subprime mortgage market in the mid-2000s, and today he’s concentrating all of his investment efforts on one commodity: water. Burry’s focus on water has attracted plenty of attention to the commodity in the investment community but trying to profit Read More

Consumer goods continue to struggle, weighed down by autos.

Which continue to roll.

Net charge offs are trending higher, which has historically been correlated to initial claims.

Based on my leading indicator, the probabilities of these picking up pace are high.

And we are already seeing stress in recent vintages, as 2 year loss rates are the highest since ’08, and well above the ’06-’08 avg. 

The financials seem like they are beginning to take notice as breadth deteriorates. Note: Fins are 33% of FY17 EPS growth.

Libor has  recently taken a breather, as y/y rates are nearing the zero. 

The flow of new credit also supports this assertion, as it typically leads economic growth by 9-12 months and turned sharply lower ~ a yr ago.

This would mean these forecasts for Central Bank balance sheets are likely moving in the wrong direction.

But equity investors continue to keep spoos bid.

With positioning among leveraged funds & asset managers (e-mini, Dow, S&P, NDX) near the highest level since Oct. 2014. (via JPM / H/t @sunchartist)

However, under the surface there is some worry.

But not among retail, as TD Ameritrade’s barometer reaches a new high. 

Foreign CB’s are still hungry for treasuries.

But maybe there’s more demand.

Falling yields have led to a divergence with global PMIs. 

Likely due to the move in commodities, primarily copper.

Which has been supported by Chinese measures. But inventories remain high. 

And credit creation is set to slow. 

So let’s have some fun, and keep an eye on crude. 

The post Weekly Chart Flow 9.10.2017
appeared first on Pervalle.