DC Lite #205

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1. US net savings. "Americans are consuming more capital than they produce. US national net savings by households, businesses and the government have been negative since 1Q23, for only the third time since 1947. The other two times were 2008-11 and 2020."

2. Retail sales. "Real core retail sales hit another record high in August … Consumer spending is supported by rising real wages."

3. FMS vs. macro. Despite pessimistic views on global economic growth over the next 12 months (net 42% expect weaker, top chart), a 'soft landing' is increasingly seen as the most likely outcome (bottom).

4. Rates market vs. FFR. "Despite surveys showing that the consensus is expecting a soft landing, rates markets are pricing in a full-blown recession."

5. Crowding vs. valuation. "Today, Financials and Industrials appear most at risk to underperform, whereas Internet and Retail stocks seem to be the least at risk."

See: The Variant Perception Blog