"Length remains elevated heading into more megacap tech results"

1. AI business spend. Firms surveyed by the Atlanta Fed say they spend ~$1,024 per employee on AI and AI-related tech, up nearly 2x from last year.

2. Cyclical vs. Defensive flows. "On an absolute basis, Cyclical sector flows, they're not terribly extreme, more lukewarm than anything. But when you look at the spread of Cyclical sector ETFs relative to Defensive sector ETFs we are starting to get into more extreme territory."

3. Nasdaq futures positioning. "Length remains elevated heading into more megacap tech results, and if Amazon, Microsoft, and Alphabet 'fail to impress, meaningful futures selling could ensue."

4. Negative SPX correlations. "There are 124,750 possible pairs of companies within the S&P, and at present 40% are negatively correlated. That's a lot ... That can ultimately be attributed to the zero-sum games created by AI and the oil price shock, and they make life difficult for investors."

5. AI CDS. Credit market jitters are especially acute across hyperscalers and chipmakers.

ICYMI