DC Lite #335

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1. Challenger job cuts. US employers announced 275k job cuts in March (vs. 172k est), the most in nearly 5 years, 78% of which were driven by DOGE actions. YTD, DOGE is responsible for more than half of all job cut announcements.

2. Transitory inflation. "One-year inflation swaps have jumped to their highest level since August 2022 ... But, when we look at forward inflation rates (that is, what traders think inflation will be from April 2026 to April 2027, and then the 12-month span after that), we actually see that these measures have come down sharply."

3. Active managers vs. US equities. The NAAIM Exposure Index dropped to 49, the lowest reading since November 2023.

4. Foreign investors vs. US stocks. "We may be seeing early stages of tectonic shift in global investment flows, with dramatic decline in demand for U.S. assets from abroad (fastest-ever pace of U.S. equity selling by official sector in single month and largest monthly outflow of U.S. assets by private sector investors in a year)."

5. SPX drop. Today’s 4.8% decline was the worst since June 2020.

ICYMI

• Wed 4/2 #334: Here is the full list of reciprocal tariffs. Noticeably absent: Canada, Mexico, Russia

• Tue 4/1 #333: "Historically, when the SPX breaks a quarterly streak of exactly 5 up quarters, forward returns are negatively skewed"

• Mon 3/31 #332: “The trend is your friend, until it ends. The U.S. stock market is no longer in an Up-trend”

• Fri 3/28 #331: "A record 51% of UMich survey respondents are now making unsolicited negative comments about government economic policy"