DC Lite #172

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1. FOMC. "No explicit signal of a September rate cut, but some very meaningful changes in the top of the statement."

2. Yield curve. Yields fell across the curve in July.

3. LOs vs. Cyclicals. "LOs’ relative exposure to cyclical sectors vs. the S&P 500 was low heading into the year and decreased even further in 1H, particularly for Energy (-11ppt, now 30% U/W) and Materials (-5ppt, now 6% U/W)."

4. August seasonality. "August historically isn’t a very good month for stocks … But here’s the catch, and there’s always a catch, stocks have historically done quite well in election years in August."

5. Rising margins. “The saving grace of rising profit margins this reporting season supports the ongoing profit story and keeps the S&P 500 in ‘buy-the-dip’ territory.”