"Investors are aggressively betting on a sudden turnaround in interest rates"

1. AI adopter optimism. "Firms currently using AI are significantly more likely than non-users to expect increased employment and revenues over the next year, even after accounting for firm and owner characteristics and location."

2. Rate-sensitive call volumes. "Investors are aggressively betting on a sudden turnaround in interest rates, and they're using call options on exchange-traded funds tied to utilities stocks and long-dated Treasury bonds to do it."

3. TLT seasonality. "Everyone is trying to position for 'the inevitable rebound rally.' Alternative scenario: Lower until the bottom pickers puke (mid-November?), THEN a bounce."

4. Q3 growth estimates (I). "Based on the average improvement in the earnings growth rate during the earnings season, the index will likely report earnings growth above 35% for Q3."

5. Q3 growth estimates (II). "Analysts expect all 11 S&P 500 sectors to deliver positive y/y growth in both revenues and earnings. Only once before, in Q2-2021, has such a perfect sweep occurred in the 25 years we've tracked the data."

ICYMI