DC Lite #531

1. Jobless claims. “After several weeks of low initial claims, we saw a large pop to close out January (week ended 1/31). This almost certainly reflects the snow/ice storm that pounded much of the country ... Continuing claims continue to run *below* 2025 levels. Still awaiting signs of labor market improvement in other data that I take as seriously as this...”

2. DXY vs. volatility. “There’s now a record correlation between the weakening greenback and volatility, another sign bigger swings are on the way.”

3. Nasdaq streak. The Nasdaq has fallen by at least 1% for 3 straight days. Going back to 1978, that’s happened 116 other times (most recent was Feb’25). Short-term mean reversion has typically followed, though the effect fades with 6-12 month returns lagging baseline performance.

4. Volatility dislocation. “The ratio of stock market volatility to bond market volatility has risen into its highest quintile since 1990 ... a high relative stock/bond volatility ratio has historically been a gift ... the forward 1-week average annualized total return of the S&P 500 Index from top quintile stock/bond volatility readings is an astounding 32.4% compared to only 7.8% the rest of the time!”

5. Claude vs. Github. “4% of GitHub public commits are being authored by Claude Code right now. At the current trajectory, we believe that Claude Code will be 20%+ of all daily commits by the end of 2026. While you blinked, AI consumed all of software development.”

ICYMI