DC Lite #469

1. Canceled contracts. "Just over 53,000 home-purchase agreements nationwide were canceled in September, equal to 15% of homes that went under contract that month. That’s up from 13.6% a year earlier."

2. Debasement narrative. "The fear that inflation and lax money will lead to the intrinsic devaluation of the dollar and other fiat currencies has been turned of late into a 'debasement trade.' It’s often said that narratives lead markets, and the dwindling dollar has become a powerful narrative."

3. Cross-asset volatility. "Most assets are sitting in the low volatility (green) zone traders are calm and pricing in stability. But a few like biotech (XBI) and bonds (TLT) are flashing high vol (red), meaning bigger price swings and more uncertainty in those sectors."

4. Earnings vs. valuations. "With earnings doing the heavy lifting in 2025, valuations are taking a breather following two years of return amplification. This is what we generally want to see in the later stages of a cyclical bull market … So far [in Q3], the expected growth rate has bounced modestly from 7% to 8%."

5. Beat rate. "The proportion of US companies beating earnings expectations this quarter is the highest in more than four years ... About 85% of S&P 500 firms to have reported third-quarter earnings so far have surpassed profit estimates, on course for the best performance since 2021."

ICYMI