DC Lite #460

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1. Breakeven employment rate. A Dallas Fed analysis estimates the breakeven employment rate has fallen—due primarily to immigration flows and shifts in participation—to ~30k, and suggests recent labor market data are consistent with rebalancing rather than weakness.

2. Re-acceleration. "Our view is that the economy is more likely to reaccelerate than stall. Policy – both fiscal and monetary – is turning more expansionary, and an improvement in sentiment should unlock pent-up demand. With supply impaired, inflation is likely to make a comeback, too."

3. AAII Sentiment Survey. Bullish sentiment among this cohort (average age of 70, average portfolio size of $4.3m) rose for the 4th consecutive week—the first time that's happened since May'24—to the highest reading YTD. This pushed the bull-bear spread up to a 2-month high.

4. 401(k) vs. Mag 7. "US workers contribute on average around $8,500 to their 401(k) accounts every year, and with 71% of 401(k) assets allocated to equities—and the Magnificent Seven having a weight of almost 40% in the S&P 500—the bottom line is that each worker in the US puts an estimated $2,300 into the Magnificent Seven stocks every year."

5. Global EPS estimates. "In the US, leadership is extending out from large-cap to small-cap stocks, as shown by improving EPS trends for both the S&P 500 and Russell 2000."

ICYMI