DC Lite #289

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1. Economic backdrop. "The current economic context is strong and rare. The present combination of low unemployment and strong GDP growth has only occurred 6% of the time historically. Prior such episodes occurred in 1965-1969 and in [the second half of the] 1990s. Each saw very strong equity market performance."

2. Tech dip buyers. As $QQQ "sank nearly 3% on Monday, spooked by Chinese startup DeepSeek’s AI progress, investors poured $4.3 billion into the tech-heavy fund — its biggest one-day haul since 2021."

3. SPX vs. easing cycles. "The blue line below shows the 1995 cycle when Alan Greenspan gave back 75 bps after raising rates 300 bps in 1994. Jay Powell just gave back 100 bps after raising them 525 bps. The main difference between 1995 and now are valuation and concentration."

4. Concentration vs. returns. "High market concentration is notable, but it’s not a bearish trading signal."

5. Econ day vol. "Over the past three months, the S&P 500’s average realized volatility has been 22% on days when there’s either a Fed rate decision, a report on consumer prices, or the government gives its monthly jobs data — double the 11% reading for all other sessions."