DC Lite #310

1. Regional PMIs. "With the five major Fed PMIs in, it looks like ISM manufacturing will be above 50.0 again in February."

2. Hard vs. soft data. "There's clearly a lot of sensitivity right now around economic data and an apparent 'growth scare.' I wouldn't argue with that too much. I would note though that once again, its the soft data that's declining much more acutely than the hard data. We've seen this before."

3. Retail investor sentiment (I). The ongoing deterioration in AAII sentiment accelerated meaningfully over the past week. Bulls dropped to 23-month lows while bears jumped to 29-month highs, pushing the bull-bear spread to the lowest since September 2022.

4. Retail investor sentiment (II). There have only been 3 other instances where the % of bulls dropped below 20 while the % of bears rose above 60. Each marked an excellent buying opportunity. The catch is all 3 were preceded by corrections of at least 10%. Today the S&P 500 is just ~5% off ATHs.

5. Hedge funds vs. TMT. "Hedge funds have been selling off tech and communication services in size, with the largest monthly sell so far in February that we've seen since January of 2021. Goldman says it's one of the largest such sells on record."

ICYMI

• Wed 2/26 #309: "US stocks are suffering from a momentum unwind, not a growth scare"

• Tue 2/25 #308: "We are running out of new gold"

• Mon 2/24 #307: "Q4 earnings season reflects a character change in the market"

• Fri 2/21 #306: "The US $SPY has been the worst performing of the G7 country ETFs since Trump re-took office"