DC Lite #355

1. NFP. "Since 1960, US employment growth has never been below 1.2% when it wasn't either in a recession or imminently headed to one … How can the Fed be so confident the job market remains healthy and needs no policy assistance?"

2. Aggregate weekly payrolls. "The index of aggregate weekly payrolls is a good monthly proxy for nominal income growth and correlates well with nominal GDP growth. It was up 5.3% on the year in April and has held in a range over the last year that is back to where it was from 2018-19."

3. Retail flows. "As long as there is full employment, households are structural net buyers of US equities (now own 38% of total mkt)."

4. Uncertainty vs. cash use. "Among S&P 500 companies, every 100-point increase in the Economic Policy Uncertainty Index correlates to a roughly 10% reduction in cash spending growth, all else being equal."

5. SPX valuation. "Compared to forward earnings, the S&P doesn’t seem particularly expensive, although it’s not cheap, either. Compared to sales, it looks massively overpriced."

ICYMI