"Cyclical minus defensive positioning at just the 17th percentile"

1. ADP employment. "Private payrolls +122K in May, largest of 11 straight m/m gains, indicating sustained labor-market momentum. Broad-based hiring across company sizes, driven by small businesses (+67K) ... Wage growth down marginally y/y for job changers (6.5%) but steady for job stayers (4.4%)."

2. Stocks vs. bonds. "Equity drawdowns are now accompanied by much shallower bond rallies relative to what we were accustomed to previously. For example, the almost 20% drawdown of the S&P 500 after Liberation Day has seen bonds gain just a little over 3% at the peak."

3. Cyclicals vs. Defensive positioning. "Cyclical minus defensive positioning at just the 17th percentile, the least since 2023."

4. SPX 2-month rally. The S&P 500 gained more than 16% over the 2-month period ending May 26. Similar rallies have typically preceded strong forward returns. See this study’s dashboard here.

5. SPX profit margin. "S&P 500's forward 12m profit margin keeps spiking to new highs".

ICYMI