DC Lite #348

In partnership with

1. Flash PMIs. "US business activity growth slowed to a 16-month low in April ... with business expectations about the year ahead also dropping to one of the lowest levels seen since the pandemic. Prices charged for goods and services meanwhile rose at the sharpest rate for just over a year."

2. Hard vs. Soft data. "The softness in US soft data (sentiment) still has not spilled over to hard data. Based on our calculation, soft data is now implying a meaningful contraction, while hard data continues to indicate above-trend growth."

3. Personnel vs. performance. "Since the beginning of March, the S&P 500 has shed a total of 719 points on days Howard Lutnick and Peter Navarro have been the biggest story. By contrast, if Bessent has been the biggest story on the day, the S&P 500 has advanced a total of 52 points."

4. Profitability. "In part, the US stock market has been so exceptional because money has been flowing in from investors using it as a piggy bank. But there’s also a fundamental reason: US companies are more profitable."

5. SPX fair value. "The S&P 500 was over-valued at the beginning of 2025. Having it fall is in line with the fundamentals. Yes, a lot of policy changes have been happening, and there is more uncertainty, but the market needed to get back to fair value. Fundamentals matter, too."

ICYMI