DC Lite #19

Welcome back to DC Lite: Daily Chartbook’s free, entry-level newsletter containing 5 of the day’s best charts & insights. Upgrade to get all 30 charts.

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1. Fed vs. small biz. "Since the Fed started raising rates, small businesses have seen a trend decline in earnings and sales...With the Fed keeping rates high at least until the middle of 2024, we should expect these trends to continue."

2. PCE (IV). "A year ago Chair Powell put out a disinflation roadmap: - Goods at zero, - housing on a path to realize the delays in measurements, - a sharp focus on 'non-housing services,' a real thing that existed."

3. Chicago PMI. The business barometer jumped to the highest since June 2022, but “don’t believe for a second that this is indicative of a sudden resurgence in national manufacturing...the leap …is due to the summer surge in civilian aircraft orders, which lead the Chicago PMI by several months.

4. Small-cap flows. After 5 weeks of consecutive inflows, saw its largest weekly outflow since September 2021 in the week ending Nov 28.

5. Small- vs. large-cap. On a forward P/E basis, small-caps remain historically undervalued relative to large-caps.