DC Lite #223

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1. Inflation expectations. "The rise in the 5yr US inflation swap over the last 5 weeks has been the biggest since early March 2023."

2. Risk sentiment. Most sentiment indicators point to a 'risk-on' environment.

3. CTAs vs. global equities. "We have CTAs modeled long +$117bn of global equities (81st %tile) after selling -$397m of equities last week globally."

4. Credit spreads vs. VIX. "One of these indicators is wrong. Comment: bond credit traders are less fickle than equity options traders, in my experience."

5. Q3 earnings. The “current 3.5% y/y growth estimate for Q3 should provide a very low bar for companies to clear. We think earnings growth will be at least twice as fast. So we are expecting a significant 'earnings hook,' comparable to the upside surprises during Q1 and Q2.”