Digging Into Past Drawdowns

The big things you need to know:

• First, we reviewed the drawdowns in the S&P 500 of 11% or more dating back to 1956, an exercise that helps to clarify why US equities have been resilient recently (in particular, strong earnings and capex dynamics).
• Second, other things that jump out in our updates include the link between crude oil and 10-year yields, the renewed leadership of the US and mega cap growth trades, the lack of movement in consensus EPS forecasts for most sectors (ex Energy, Mag 7, and Tech) in September, the slight softening of C suite confidence we saw in the latest Duke CFO survey, and the surge in expectations for a Democratic sweep in betting markets.