DC Lite #431

1. Corporate profits. "NIPA or production-based corporate profits have been cooling off. So far this year (two quarters), profits have dropped 1.3% SAAR and up just 4.3% over the last four quarters, the weakest pace since Q2 ‘23. The scope of this is different than S&P500 corporate earnings."

2. Central banks vs. gold. "Foreign central banks now officially hold more gold than US Treasuries — for the first time since 1996."

3. FFR vs. stocks. The equal-weight index typically outperforms the S&P 500 when the Fed cuts rates.

4. Risk on/off. Both RSPD/RSPS (EW Discretionary vs. EW Staples) and SPHB/SPLV (high-beta vs. low-vol) are making new highs, signaling a strong shift toward “risk on” sentiment.

5. Mag 7 vs. Bottom 493. "Analysts expect Magnificent Seven earnings growth to stabilize over the next six quarters, but still deliver double-digit growth. The baton is being passed to the S&P 493, whose earnings are expected to accelerate into the mid double-digits by Q3 2026."

ICYMI