DC Lite #49

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1. GDP forecasts. "The lack of a slowdown in 2023, which surprised the Fed, the consensus, and markets, was only a US story, and we are starting to see the same pattern play out again in 2024."

2. Jobless claims. The labor market remains tight as both initial and continuing jobless claims fell more than expected, dropping to the lowest since September 2022 and October 2023, respectively.

3. Corporate spreads. IG and HY corporate bond spreads suggest investors remain confident about future earnings and cash flow. The former (top panel) is at its lowest in 2 years.

4. Active managers vs. US equities. The NAAIM Exposure Index dropped sharply over the past week, to 54 from 80.

5. FMS rotation. “In January, FMS investors rotated into REITs, staples, commodities and added to cash...and trimmed longs in bonds, banks, insurance, telecoms and cut further UK.”

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