"A good chunk of the stock market is trading like a bet against semis"

1. CPI. "The share of CPI components running above 4% continued to move lower, while the overall share of components exceeding 2% remained stable. That said, the share of components running above 4% is now getting back to levels that were common before the pandemic."

2. Consumer sentiment. "Another bad consumer sentiment reading is, in itself, not big news anymore ... What's notable here is that consumer sentiment among Republicans is now tumbling, erasing most of the gains made since Trump's victory at the end of 2024."

3. TLT flows. "Lots of ways to measure sentiment, but more than a few people seem to think buying Treasuries is a good idea. Most inflows into TLT since September 2024, which did not work out great"

4. SPX vs. Semis. "A good chunk of the stock market is trading like a bet against semis. Across all stocks, the 10th percentile correlation with semis is the most negative in 35 years."

5. Q3 EPS growth. Analysts' optimism toward Q3 earnings continues: estimates are now up 1.4% since June 30 (vs. 1.2% last week). As a reminder, estimates are usually reduced during the quarter. All 11 sectors are expected to see positive YoY growth, led by Energy, Tech, and Communication Services.

ICYMI