DC Lite #58

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1. ECI. "The Employment Cost Index came in at 0.9% for Q4, below the est of 1.0% and the prior 1.1%. This is the most complete measure of compensation for workers, and is reflecting the decline in inflation."

2. Gold vs. major currencies. Gold is "currently on the verge of making new highs in 6 different fiat currencies."

3. Investor sentiment (II). "Consensus Bulls are at a new 6-year high. The last time this survey showed so much optimism the S&P 500 proceeded to churn sideways for 18 months."

4. Defensive rotation. "If Consumer Staples relative to the S&P500 are above those December lows, we want to be short equities. If US Treasuries are above those December lows relative to High Yield Bonds, we want to be short equities."

5. US vs. EU (I). "The US is currently seeing the widest gap between S&P 500 current earnings yield and MSCI Europe Index ever. Put simply, Europe has never been this cheap versus the US."