Topley’s Top 10 Monday – January 22, 2024

1. S&P New Highs….7th Longest Run Ever Between New Highs.

2. Earnings Recessions Set to End.

Nasdaq Dorsey Wright Earnings estimates see dip in Q4 2023 before positive growth throughout 2024
The last time we showed you the chart below, Q4 earnings growth was expected to be positive.

Now, though, it’s currently on track for earnings to dip almost 2% YoY (orange bar).

3. What Outperforms in the Years Following Rate Hikes?

Blackrock Despite their “risk asset” label, all stocks are not created equal. With inflation and economic uncertainty still high, we retain our focus on quality and lower-beta equities. Both have outperformed higher-risk counterparts in the years following the end of rate hikes, as shown below. While higher valuations, inflation and rates may mute overall stock market returns relative to the prior decade, we see attractive stock selection opportunities in 2024 amid a Fed pause and outlook for broadening market breadth.

4. China and Hong Kong Stocks Have Erased $6 Trillion Since 2021 Peak.

Abhishek Vishnoi, Charlotte Yang of Bloomberg News, 1/21/24

Found at Advisors Perspectives

5. Bitcoin Update

by Michael Batnick There was more speculation leading up to the launch of the Bitcoin ETF than anything that I’ve ever seen. People were debating how much money these ETFs would take in and what impact the inflows would have on the underlying price.

The nine new spot Bitcoin ETFs that came to market have collectively taken in just under $4 billion. (H/t Eric Balchunas on all this data)

IBIT (iShares) and FBTC (Fidelity) took 4 and 5 days respectively to get to $1 billion in assets. The only other ETFs to get there faster were BITO, the BTC futures ETF, which took 2 days, and GLD, which took 3 days.

The volume that these things are doing is arguably more impressive than the assets. Balchunas notes that:“For context, as a group the Nine’s $1.2b in daily volume puts them in Top 1% of all ETFs (w/ $GBTC as well). But even if you single them out, $FBTC & $IBIT each in Top 2%. Keep in mind the avg age of ETFs in Top 2% is prob like 14yrs old. So pretty wild to get there in a week.”

So the launch of these ETFs was a resounding success. Hard stop. The price of the underlying is more of a mixed bag. The ETFs are down ~10% since they started trading. But Bitcoin itself is up almost 40% over the last three months as anticipation of the launch grew stronger. It shouldn’t be terribly surprising that it didn’t go up in a straight line after the announcement of something that had been well-telegraphed. The market, every market, is pretty good about pricing stuff in. This is not to say I called this, I didn’t, but I’m not surprised either.

6. Number of Ships Thru Suez Canal Cut in Half.

Torsten Slok Apollo Normally, 200 ships travel through the Suez Canal from South to North over a week, but that number has recently declined to 100, see the first chart.For the Panama Canal, Northbound traffic has also declined 50%, from 90 ships per week to 45, see the second chart. The third chart shows that the price of transporting a container from Shanghai to Rotterdam has tripled. The bottom line is that higher transportation costs are putting upward pressure on goods inflation.

7. Existing Home Sales Lowest Level Since 2010.

8. Renting vs. Owning Update

Food for Thought: Renting vs. owning:

9. Empty Nesters Own Twice As Many Large Homes As Millennials With Kids-Redfin

What is Truflation Truflation aggregates, calculates and publishes the first daily, unbiased, real-market inflation and economic data.

We also make our data available on-chain via the Chainlink infrastructure making them directly compatible with various DeFi products and Web3 applications.

Our mission is to offer the most objective, decentralized, and current economic and financial information alternative in the form of on-chain price indexes to enable a new generation of blockchain products.

@Charlie Bilello Truflation, which attempts to calculate a real-time inflation rate in the US, is suggesting actual inflation is over a percentage point lower at 1.85%. A year ago this inflation gauge was above 6%.

10. Americans are Actually Pretty Happy with Their Finances.

Axios by Felix Salmon