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- "This rotation has been going on for a while"
"This rotation has been going on for a while"
DC Lite #716
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1. Nonfarm payrolls. "A much stronger U.S. jobs picture. Payrolls rose 165k in October, topping every forecast in the Bloomberg survey. The 3-month moving average has now climbed to 137k, up from just 28k in July and the strongest since May. The improvement is also broadening"
2. AI vs. household wealth. "A pullback in AI stocks could hit household wealth and weigh on spending. Positive wealth effects have added 0.4 percentage point to US GDP over the past year"
3. Hedge funds vs. AI. "Per GS, HFs sold AI stocks at the fastest pace in over 5-years & on a trailing 20-day basis, HF selling reached a 5-year extreme at -3.0 SDs"
4. AI vs. ex-AI. "It's one thing for non-AI stocks to outperform AI stocks for a week or two. But this rotation has been going on for a while. Consider the performance of AI versus non-AI stocks over rolling six-month periods. The differential is now the worst we've seen during this four-year bull market."
5. Tech re-rating. "The KOSPI semiconductor sector's FY3 P/B has fallen to a historical low of around 0.7x, a level that has historically indicated a bottom of semi cycle and implied encouraging forward returns"
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