DC Lite #203
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1. Economic surprise. "Growth data has been more likely to fall short of expectations than at any time in nearly a decade."
2. Wage Growth Tracker. In August, wage growth rose for job stayers (to 4.7% from 4.5%) but fell for job switchers (to 4.6% from 5%). This marked the first time since October 2018 that wage growth for the former outpaced the latter. Overall wage growth ticked down to 4.6%, the lowest since December 2021.
3. Markets vs. Fed. "Markets are wrong about Fed cuts ... If we do get a recession, the Fed will likely cut more than is currently priced in; if we do not, they will probably cut less."
4. SPX seasonality. "Since 1950, the second half of September has delivered the worst S&P 500 returns of any two-week trading period in the calendar year. The last 11 days of the month are historically even more dire; since 1928, the median S&P 500 return is negative for 10 out of those 11 days."
5. Q3 EPS growth. 7 sectors are expected to report YoY earnings growth in Q3, including 3 that are expected to grow by double-digits (Tech, Healthcare, and Communications).
