Daily Brief - The Thursday Market Checklist

TLDR

A new low for S&P 500 P/E shows we’re working our way to more sensible valuations, albeit SPX forward earnings keep trudging higher. But we really don’t like Economic Surprises making new lows - it could depress earnings eventually.

Also the TLI is squarely into bullish territory suggesting a pause in the bearish price action.

The TOGGLE Market Checklist

The good: S&P 500 working its P/E ratio lower is encouraging. We’re looking at 14x or lower to assume things have stabilised, and we recently made a cyclical low of 15.8x.

The bad: Citi Economic Surprises made a new low after apparently stabilising. This might lead to weakness on S&P 500 earnings - of which we perplexingly see none yet.

Upcoming: Eyes focused on PMIs in 2 weeks.

Show me the data

Here are the links to all the data points discussed above:

• Growth. US Citi Economic Surprises / Learn ↗
• Growth. US ISM New Orders / Learn ↗
• Inflation. US Citi Inflation Surprises /Learn ↗
• Earnings. SPX Forward Earnings / Learn ↗
• Valuations. SPX Forward P/E / Learn ↗
• Valuations. SPX Equity Risk Premium / Learn ↗
• Positioning. SPX Positioning / Learn ↗
• Seasonality. SPX Seasonality next 3M / Learn ↗

Idea Spotlight: Nike

Price level indicators for Nike dropped abruptly to 104.92 and historically, this led to a median increase in price of 14.88% over the following 3M. TOGGLE analyzed 19 similar occasions in the past to produce the median projection and this insight received 6 out of 8 stars in our quality assessment.

Reuters reported Thursday that Nike will exit its Russia operations over the coming months, following similar moves from McDonald's and Starbucks.