DC Lite #64

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1. Home prices vs. rates. "Lower interest rates would bring more buyers into a market already short inventory, thereby increasing home prices."

2. Bull & Bear. BofA's Bull & Bear Indicator jumped to 6.8 from 6.1 "driven primarily by strong inflows to risky EM assets."

3. Small-cap bull case. “Factors supportive of small cap outperformance in ‘24 include bottoming profits, historically attractive valuations (29% discount to large), improving market breadth, a Fed cutting cycle and inflecting macro indicators that are correlated with relative performance.”

4. SPX forward P/E. At 20.3, the S&P 500's forward P/E ratio has risen above 20 for the first time in 2 years.

5. 2000 vs. 2024 (I). "Lots of talk about a bubble in AI/Mag 7...At this point, valuations at the top are no where near as frothy as they were at the height of the Dot Com Bubble. The 5 largest stocks traded at 43x Fwd PE in March ‘00, a 59% premium to the Mag 7’s current multiple of 27x."

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