4,231
0.57%
4,231
0.57%
12,896
0.91%
12,896
0.91%
33,440
0.31%
33,440
0.31%
1,808
0.05%
1,808
0.05%
23,842
-0.48%
23,842
-0.48%

Quote of @Lvieweconomics
S&P500 dealing with a major resistance zone, some short-term signals starting to wave red flags (e.g. the below), Fed minutes next week...
The equity volatility curve is steep at the moment, highlighting complacency in markets.
Quote of @Callum_Thomas
retweet-replay-time
Off-Topic ChartStorm time!

This week: valuations in focus...
OECD Leading Indicators point to deteriorating outlook

"Dragged down by historically high inflation, low consumer confidence and declining share price indices, the CLIs remain below trend and continue to anticipate a loss of growth momentum in most large OECD economies"
The flightless long-beaked canary in the housing market coalmine... (updated for latest data)
10. Further on the ERP, my version shown inverted below is basically presenting a neutral valuation signal (neither cheap nor expensive vs history), while absolute valuations (combined PE ratio) is still on the expensive side.

@topdowncharts
9. Stifel suggesting that the ERP can/could/should go lower... (which if equities did all the heavy lifting would mean a renewed bull).

As a side note, while this version of the ERP did not rise to cheaper levels, it is still positive, and high vs history.

h/t @SethCL
(the music powering today's chartstorm)

(p.s. why is it that in this day and age we have video calling, but not anti-gravity racing)
8. Exhibit 2 on relative value extremes: big value in Small Caps vs large caps -- yet another thing that did it like dot-com on the way in, but not on the way out (yet?)

h/t @MikeZaccardi
7. Similar note (echoing the previous charts), despite some initial progress there remains a bunch of valuation excesses that have *not* been corrected...

especially Relative Value (e.g. chart below which shows "growth" still extreme expensive vs "value")

h/t @CliffordAsness
6. Further on growth/expensive stocks: "market cap of stocks with a Price/Sales ratio >10x went down from 14T$ to about 4T$ just to rally to 8T$ again."

Market is not ready to give up on the valuation excesses of the past couple years.

h/t @KailashConcepts via @MichaelAArouet
5. Further on growth stocks... Tesla cheap? 🤔

"average 2-year forward P/E is 89x. At its current 2023 P/E of 52x, TSLA has not traded this cheap since April 2020, in the middle of the Covid-recession."

h/t @garyblack00
4. On a similar note, growth stock valuations are no longer expensive, but are still a ways off the absolute lows of the last two major bear markets.

Does this matter?

Should we expect/demand a return to those levels?

h/t @Marlin_Capital
3. On the topic of forward PE ratios...

The green line (cheapest parts of the market) went to levels that you would probably call "cheap".

The red line however (expensive parts of the market) only came down to a higher plateau.. #StillExpensive

@topdowncharts
2. S&P500 forward PE ratio vs 10-year TIPS real yields (inverted): basically implying that at least in this window it's all about the mopo (monetary policy and liquidity settings).

ignore PE, explore real yield?

h/t @steve_donze
1. PE10 Ratio (price to 10-year average of trailing earnings -- designed to smooth out the sometimes wild gyrations in EPS through the cycle): big reset in the USA...(but) it is still high vs history and vs global peers.
Off-Topic ChartStorm time!

This week: valuations in focus...
Quote of @topdowncharts
"gap between Consumer confidence vs Business confidence reached a record level in July — eclipsing the previous record set in June 2008"
Chart of the Week - Crisis of Confidence

Consumer confidence has collapsed all around the world this year, nearly matching the pace and magnitude of the drops seen during the global financial crisis and pandemic panic.
Quote of @Callum_Thomas
Could argue the first 3 options are kind of the same thing, or at least option 1 & 3, but anyway... looks like the crowd has spoken (valuations it is!):
What would you like to see covered in the next "Off-Topic ChartStorm"?
What would you like to see covered in the next "Off-Topic ChartStorm"?
S&P Investment Manager Index
-slight lift in risk appetite...
-but market outlook dropping
--investment managers not buying it.

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