DC Lite #181

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1. NFIB (I). "July’s Optimism Index was the best reading since early in 2022 ... due almost entirely to an 18 point improvement in Expected Business Conditions ... Six other components were relatively unchanged ... It’s a bumpy road ahead."

2. PPI (II). Trade services (i.e., margins received by wholesalers and retailers) saw the second-largest drop on record (-1.3%) and are now negative YoY.

3. Investment Manager Index. "Risk appetite has fallen for a third successive month in August ... down to a one-year low of -10% in August from -5% in July."

4. FMS rotation. "Investors increased allocation to bonds, cash, and healthcare ... and reduced allocation to equities, Japan, Eurozone, and materials."

5. Cyclicals vs. Defensives. "April is when economic surprises peaked and began a persistent slide lower. That peak in surprises also marked a peak in cyclical stocks relative to defensives, a downtrend we think hasn't ended, yet."