DC Lite #65

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1. Consumer expectations (II). "The share of households expecting their financial situation to improve over the next year just hit the highest levels since September [2020] and the second-highest since the start of COVID."

See: Apricitas Economics

2. Weak demand talk. Mentions of weak demand are at the highest since Covid.

3. Stocks vs. bonds. "The rolling 2-month correlation of equity returns and change in interest rates is now modestly positive for large caps, while it remains decidedly negative for small caps—a divergence we have not seen over the last 2 years."

4. Industry group highs vs. lows. "While the headlines discuss narrow participation, the actual story is one of broad strength beneath the surface."

See: Hi Mount Research

5. EPS growth: Mag 7 vs. bottom 493. And finally, “while a big gap is still expected for 1Q, the [earnings] growth differential is expected to narrow meaningfully in 2Q (+20% for the Mag. 7 vs. +8% for the 493), close the gap in 3Q and reverse for the 493 in Q4.”