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1. Recession fears heighten
"For months the Global Fund Manager Survey had shown investors assigning a lower likelihood of recession, but all that changed in March when the perceived likelihood jumped to 42% from 24% in February”.

2. Consensus view is a technical recession by Q3
When has the consensus ever been right.
3. JPM says “not us”.
“Recent bank failures in the US have raised questions about the consequences for consumers. Our Chase consumer card transactions data (credit and debit) through March 19 do not show a meaningful impact on spending in the first week after the event.”

4. Used car values continue to climb, 4th month in a row
“After spending most of 2022 on a downward trajectory, used car prices creep upward for the 4th consecutive month in March”.

5. IP-NO
“Global IPO volumes at a 4yr low, down 70% YoY. Biggest decline is the US, with only $3.2B raised so far”.

6. Big bills for small banks
“The "Big Problem" with "Small Banks" is they have a LOT of exposure to the apartment and commercial real estate loan space. There is a massive debt wall coming when there is an oversupply of multifamily units and too much office space for the "work from home generation."
7. Bond yields & financials
“The 10-year US Treasury bond yield peaked last year at 4.25% on October 24. It was down to 3.38% on Friday. Bond investors have been waiting for something to break in the financial system since last summer when the yield curve inverted. They are betting that something broke when SVB imploded”.
8. Eight of 11 sectors are down YTD
“Only three sectors are up so far this year, and they are crushing the market. Communication services, Technolog, and Consumer Discretionary”.
9. Sectoral market breadth
Six of the eleven US sectors have a majority of their stocks trading below their respective 200-day moving averages.
10. Sectoral market breadth (2)
All of the eleven US sectors have a majority of their stocks trading below their respective 50-day moving averages. Energy currently scores 0%.
11. Winning sectors pulled forward by the Big 8
“The three outperforming sectors are doing well because they include the MegaCap-8 stocks, which as a group are up 26.5% ytd based on their collective market cap”.
12. The S&weeeeee
“The S&P 500 Tech sector’s forward P/E has climbed by 30% since October”.
13. Nasdaq has the best start since 2009
“After underperforming S&P 500 in 4Q22 by most since 2002, NASDAQ 100 is having best quarter vs. S&P 500 (thus far) since 1Q09”.
14. Fed hikes usually break something
“History repeats itself over and over again, as Fed tightening cycles end with a financial event".

15. Yield curve usually breaks something
“With the benefit of hindsight, the era of free money under Fed Chairs Ben Bernanke, Janet Yellen, and Jerome Powell created a big bubble in the banks' bond portfolios. The Treasury contributed to the bubble by issuing lots of bonds that the banks purchased at much higher prices. Silicon Valley Bank is that broken something that has raised concern about small community and regional banks”.
16. Dividend to 10Y yield narrows
“The spread between the S&P 500’s dividend yield and 10y U.S. Treasury yield remains negative but has moved sharply higher of late”.
17. 10y2y spread jumps to 1970 levels
“The 10y2y Treasury yield spread has jumped by nearly 50 basis points thus far in March, a gain only seen in recessions going back to late-1970s”.

18. Maturity wall of the S&P 500
Of the collective outstanding debt amongst all S&P 500 (ex-financials), 44% of it is not due until after 2030.

19. No buybacks for Christmas
Share repurchases amongst S&P 500 firms declined 22% in the last quarter of 2022.

20. Mo Money Market Funds
The relationship between the inflows of US Money Market assets and outflows of US domestic bank desposits.

21. Mo Money Market Funds (2)
“The surge in flows this month helped push overall assets in money funds to a record $5.1tn on Wednesday”.
22. Mo Money Market Funds (3)
A zoomed out chart of the growth of MMF assets on their way to a record $5.1 trillion.

23. Fund Manager Survey: Love cash, hate stocks
“With the S&P 500 up two weeks in a row in the face of terrible news and the Nasdaq 100 at 7-month highs, think about this. The most hated asset is US stocks, while cash is the most loved. "If everybody is thinking alike, somebody isn't thinking”.

24. Fund Manager Survey: Bearish banks
“Fund manager survey investors are bearish on banks, while most banks are in very good shape”.

25. 99 Problems but more banks ain’t one
“The number of U.S. banks has been in steady decline over past few decades . In last 31 years, the total is down by 65%; and since 2009, we've seen <20 new bank charters per year”.

26. Fund Manager Survey: Bearish real estate
Survey fund managers are the most bearish they have been on real estate since October 2020.

27. Fed financial stress levels approach prior crisis levels
“Fed Financial Stress Index is currently reading 1.57. In the last few decades, it has seldom surpassed that level. Some occasions when it did include; 1998, 2001, 2007-09, 2020”.

28. Euro banks beware
“The Euro zone (purple) is more bank-based and credit-dependent than the US (red). So it's remarkable that the Euro has risen in recent weeks, instead of falling. The negative credit impulse - and possible recession - will be more pronounced in the Euro zone than the US”.
29. How crude
“Bearish bets are piling up in the oil market, defying traders' calls for a demand-driven rebound”.

30. Strapped for cash
“The level of deposits as a share of GDP is now below its pre-pandemic trend, suggesting that households now have lower levels of liquid cash available than they did just a few months ago. Not only do consumers have less cash readily available, but the movement of money from checking accounts to money market accounts likely has negative implications for consumer spending going forward, given the marginal propensity to consume out of money market holdings is likely to be lower than the marginal propensity to consume of money held in a checking account”.
31. First rate cut as soon as July?
The market is pricing in a peak Fed Fund rate of ~5% in May 2023, followed by a 25bps rate cut in July, and a 2.8% rate by the end of 2024.

32. Hold up, something doesn’t look REIT
“S&P 1500 Office REITs Index has fallen by nearly 45% over past 200 days (rolling 200d performance consistent with GFC drop) and is hovering near lowest since 2009”.
33. Office exposure declines
“Commercial real estate has been recently slaughtered, as investors grapple with low occupancy rates, high leverage & refinancing costs, potential credit crunch due to regional banks being big CRE lenders. CMBS is a big credit asset class, put it on your watch list”.

34. More context on office rents and leasing demand
“More and more office landlords will turn to $IWG to help manage & fill their empty(ing) space:.

35. As for me, I like the metal
“March is set to be the first month of net inflows into gold ETFs for 10 months, while the volume of bullish options bets tied to the funds has approached record levels”.

36. Ozzy immigration
“Net Immigration to Australia was closer to 250k people pre pandemic. Population growth in Australia is already at the lowest levels in modern history. Immigrants contribute massively to Australia's economy and are a large reason for the country's modern economic miracle”.

37. China: “put it on my credit card”
“China’s central government is borrowing at the fastest pace on record”.

38. Sachs sees selling from savvy savers down by the seashore
Goldman Sachs suggests that retail investors will sell more ~$1.25 trillion in equity holdings by the end of 2024 as they drawn down their portfolios to cover expenses.

39. From QE to QT
“The entire QE and QT cycle visualized”.
That’s all she wrote!
Thanks for reading,
Conor