"If the 10-year yield rises to 6%, that suggests an equity P/E ratio of 16x"

1. Labor market differential. "Labor differential-share of consumers saying jobs are 'plentiful' minus share saying jobs are 'hard to get'-is at narrowest in more than five years"

2. Assets vs. first hike. "In the first eight sessions since the Fed rate hike, utilities, gold, silver, and the Bloomberg Spot Commodity Index have posted their worst performance on record when compared with every tightening cycle since 1973."

3. Equity ETF flows. "For the month of September, equity ETFs are averaging about $3bn per day. That is meaningfully down from the over $7bn that we saw earlier in the summer"

4. New lows. "I'm not seeing many new lows in Tech and Financials. In fact, I'm seeing almost none."

5. Bond vs. equity valuations. "Per the Fed model below ... if the 10-year yield rises to 6%, that suggests an equity P/E ratio of 16x. It is currently 19-20x. A 4-point drop in the P/E ratio is a 20% valuation haircut, but if it's offset by 30% earnings growth, we could be spared the kind of drawdown we experienced in 2022."

ICYMI