in Estimated risk per 25.07.2022 09:05:00
Inventories are rapidly increasing. Stocks hit their seasonal low in early March 2022. now up to 118% since then. More than double!
This inventory chart is courtesy of Altos Research.
As of July 22, inventories were 526k (7-day average) compared to 509k the previous week.
Inventories rose 3.3% from the previous week. Stocks are increasing much faster than usual for this time of year (both in percentage terms and in total stock added).
Stocks are still historically low. Compared to the same week in 2021, inventories are up 30.5% from 403k, however, compared to the same week in 2020, inventories are down 17.9% from 640k. Compared to 3 years earlier, inventories decreased by 45.8% from 969 thousand.
1. Seasonal bottom (happened March 4th for Altos) ✅
2. Inventory compared to last year (happened May 13th for Altos) ✅
3. Stocks are up from two years ago (now down 17.9% according to Altos).
4. Stocks increased compared to 2019 (now down 45.8%).
Here is a graph of stock changes compared to 2021, 2020 (stage 3 above) and 2019 (stage 4).
The blue line is year-on-year data, the red line is compared to two years ago, and the purple dotted line is 2019.
Two years ago (in 2020) inventories were shrinking every year, so comparing two years will get easier every year.
Based on the recent increase in inventories, my current estimate is that inventories will rise from 2020 at the end of August this year. (next month) and return to 2019 levels at the beginning of 2023.