U.S. Futures & World Markets

It's good to be back in the saddle after taking a break from writing last week. It seems like I didn't miss much, with a quiet tape keeping the S&P 500 within 1% of all-time highs. CPI data remained tame, giving investors more reason to believe the Fed can hold off on hiking rates near-term.

It's not your imagination that markets have been unusually calm lately. The VIX sits under 15 this morning, well below its long-run average of 19.50. Here is another stat from Barchart: "NYSE hasn't had a single 80% downside volume day this year. Hasn't happened in at least 30 years."

In this note, I tend to focus on the daily news and short-term market moves, but as an investor, it pays to zoom out and take the long view. The S&P 500 is up almost 16% per year in the 2020s. That's all the stuff you had to ignore to earn those returns.

S&P Futures vs. Fair Value: +12.00  |  10-Year Yield: 4.68%

CORE Headlines

Charts & Data

S&P 500 up almost 16% per year in the 2020s — this is all the stuff you had to ignore to earn those returns. Ben Carlson: a reminder that long-term investing requires looking past the noise.

Analyst expectations for 2026/27 earnings have been significantly and consistently improving — bucking the historical trend since 2000 where estimates fade as the year progresses. Topdown Charts: "It is an outlier." FEMO — Fabulous Earnings Momentum — is real.

US macro is looking decent: credit managers and purchasing managers reporting improved conditions, unemployment at the lows. Topdown Charts: the fundamental backdrop supports the analyst optimism.

53% of households now expect interest rates to rise over the next 12 months — the highest since November 2023. @samueltombs via Daily Chartbook: the Fed's hawkish tone is cutting through to Main Street.

Q3 GDPNow dropped to 4.3% from 5.8% on Aug 6, driven by declines in consumer spending and business investment. Augur Infinity via Daily Chartbook: still strong but decelerating from the initial blowout reading.

Bitcoin's trading range at the 0.5th percentile of all history — only 4 other episodes have been this tight. No 3% daily close in 30 days. Glassnode via Daily Chartbook: "Calm before the storm?"

Global equity funds attracted $18.62B in the week through August 12 — 12th consecutive week of inflows. Europe led with $13.52B. Reuters via Daily Chartbook: investors remain firmly in risk-on mode.

Momentum crowding fallen sharply from the July unwind peak, though remains above the historical median. JPMorgan via Daily Chartbook: the positioning reset is constructive but not complete.

Small caps should outperform into 2027 — the yield curve gives roughly a 15-month leading indication for relative performance. Tom McClellan via Daily Chartbook: a framework-based case for continued small cap outperformance.

VIX below 15 and S&P within 2% of an all-time high — market was higher 12 months later in 84.4% of observations, average gain +10.8%. Grant Hawkridge via Daily Chartbook: one of the most historically reliable setups in the data.

AI-related issuance already accounts for nearly 40% of longer-duration investment grade corporate bond supply. Torsten Slok, Apollo: "The financing needs are only getting larger."

Goldman expects debt to fund 35% of hyperscalers' capex by 2027. Credit markets are joining the AI buildout. Goldman Sachs via Daily Chartbook: what began as an equity story is now a credit story too.

Interesting Reads

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.