DC Lite #95

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1. Household net worth (I). "We est. avg. household net worth increased 7.9% in 4Q23 (vs. +5.2% in 3Q23 & -4.1% LY)."

2. Wage change. "One sign of loosening in the labor market. The percent of individuals with zero wage change in the last year has increased to 12.6%, the highest since December 2021. Series tends to follow the unemployment rate by a few months. Inflationary impulse from the job market is fading."

3. Gold vs. real rates. "Too many people are convinced that gold cannot rally without a real rate tailwind. Historically, when gold rises by 20% in a six-month period, 10-year TIPS fall by 25 bps on average. And, there are many cases where real rates rise while gold rips."

4. Record liquidity. "There is record-high liquidity to push stock prices higher and credit spreads tighter. In particular, once the Fed starts lowering interest rates, some of the $6 trillion in money market funds is likely to find its way into stocks and credit."

5. SPX vs. Fed Funds rate. A "large chunk of the 1990s run was spent in the top % decile above the 200-day average and with a Fed Funds rate above 4%."