DC Lite #291

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1. AI adoption. "Only 6% of companies report using AI for regular production today ... [even though] the types of work tasks automatable by generative AI would result in several thousands of dollars of cost savings per worker per year."

2. Yields vs. stocks. The level of rates matters, but the reason behind the move in yields are more important in explaining equity market performance.

3. Active managers vs. US equities. The NAAIM Exposure Index fell by the most since August over the past week, dropping to 68 from 86.

4. R2K vs. SPX Tech. "The fate of small cap stocks may simply be tethered to large cap technology stocks ... The correlation of their respective total returns since 1990 suggest a strong inverse relationship at -0.71. ... if tech stocks ever fall from grace, small caps may prove the best antidote."

5. Small vs. large valuations. "Historically, a small-cap discount as large as today's has nearly always led small-caps to outperform."