DC Lite #515

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1. CPI. "Virtually all of the ‘excess’ 12m core CPI inflation is goods-driven inflation. If you think, like I do, that this is primarily tariff effects on relative price levels, that suggests more easing in CPI to come later in the year as tariffs fully bake into the base, though housing may contribute more after the sample rotates in April."

2. Implied Fed funds target rate. "Theme over the past few months: market says bye bye bye to rate cuts."

3. Investment Manager Index. "The start of 2026 has seen the ‘risk-on’ mood gain further traction among institutional investors. Expectations of US equity market gains in the coming months are higher than we’ve ever seen in over five years of survey data."

4. Tech vs. ex-Tech flows. "Technology sector funds have experienced outflows recently amid stretched valuations and shifting investor priorities, while other sectors have drawn inflows."

5. SPX guidance. The number of companies that issued positive EPS guidance for Q4 (50) is above the 5- and 10-year averages. Meanwhile, the number of companies issuing negative guidance (57) is below the 5- and 10-year averages.

ICYMI