8 Markets Charts Keep Wall Street Up All Night

Plenty has been scary on Wall Street this year. Here are some chilling charts that keep Wall Street up all night:

Fed activity has already been priced in, suggesting that the higher yields available from extending into the short end of the curve may be worth embracing.

"Prior to the pandemic, the equilibrium of the US labor market was defined, on average, by wage inflation of 3.3% with 4.7 million more unemployed workers than job openings. Currently, wage inflation is running as high as 6.7%, with 4 million more job openings than unemployed workers."

"An increase in the labor supply (less likely) or an increase in unemployment (more likely) of roughly 8.7 million jobs is needed in order to get inflation back down to the Fed's target. And given a 159-million-person US labor force, this would imply a potential increase in unemployment of over 5%."

The spike in mortgage rates, historically elevated home prices, negative real (inflation-adjusted) incomes and some other factors have caused housing into a recession.

"While leading indicators of rent inflation have crashed to negligible levels around 1% annualized, the construction of rent indices in CPI means that index is lagged."

"At 40% of core CPI, rent inflation needs to decline dramatically to get monthly core prints close to 2% annualized."

"The current market pattern aligns closer to the bad crashes of 2009 and 1929. This chart should spook investors that it might not be that way. Obviously 1929, 2020 and 1987 all had major 2x+ standard deviation selloff days. Might we see that in 2022 as well?"

"The Manufacturing PMI New Order Index is in a downtrend and moving lower than the 47% level today, where a significant economic slowdown often occurs, even a recession."

QT has been a drag on equities. Even if the Fed slows or stops raising interest rates, they will not soon let up on the QT brakes.

"Our tracker of capital spending intentions from the various regional PMIs points to slowing ahead. Over the last six months core durable goods shipments have been flat. Look for this to go negative."