DC Lite #145

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1. New home construction. Housing starts and building permits dropped to the lowest since July and June 2020, respectively.

2. Equitization. "Firms are not liquidating ... Debt is being written down and exchanged for equity, and that is keeping firms alive ... Because there’s a lot of dry powder sitting on the sidelines— at least $1 trillion in private equity and another $400 billion in private credit."

3. Risk appetite. "Flows continue to be boosted by rising risk appetite. In our reading, while risk appetite is now elevated it is still within its historical band and not yet at an extreme."

See: TKer by Sam Ro

4. FMS positioning (I). In absolute terms, FMS investors are most overweight equities, EU, Healthcare, and Tech. They are most underweight RETIs, Utilities, bonds, and UK.

5. SPX valuation. "The current AI bubble is bigger than the 1990s tech bubble."