Eight valuation, credit and fiscal instruments plus a nineteen-voice sentiment roster, read every Monday against the deployment rules. Data as of the 4 Sep close.
4.36
frothy · hold dry powdervs last week 4.37 (21 Aug) — essentially flat, −0.005 unrounded
Backtest context: at composite 4.5+, historically a 40% probability that a 20%+ real decline begins within 36 months (29% for 30%+) — but 4.5+ zones also produced the longest melt-ups. The signal is regime, not timing.
Eight instruments
weight × score, renormalised over 8/8 covered
What changed this week
12-month momentum score 4.03 → 3.80 (−0.23), now +13.7%
Slok 12-month score +1 → 0 — flags that a September hike likely cascades into more hikes
El‑Erian conviction 3.0 → 3.5 — names hyperscaler bond issuance crowding out Treasuries
Fed read sharpened: Warsh's hawkish Jackson Hole speech plus a hot 4 Sep jobs report pushed September hike odds to ~66–70%, from ~37% a week earlier
New statements, scores unchanged: Lee, Siegel, Sonders, Roubini, Krugman, Burry
Who expects what
12-month vs 36-month outlook · size = conviction · tails from Aug 21
Sentiment roster
19 voices · direction at 12 / 24 / 36 months · conviction 1–5
FED · WARSH
Policy headwind, sharpening
Hold 3.50–3.75% (9–3 vote, 28–29 July) — unchanged, next meeting 15–16 Sep. Chair Warsh's Jackson Hole keynote (28 Aug) reaffirmed the 2% PCE target, called inflation "concerning" despite better summer prints, and gave no dovish forward guidance. A hot August jobs report (released 4 Sep: +162k vs +53k expected, with upward June/July revisions) followed. CME FedWatch-implied odds of a September hike jumped to roughly 66–70%, up from ~37% a week earlier.
This is a live risk to Fed-dependent bull cases on the roster — Yardeni's 8,400 target assumes no Fed derailment, and Lee has explicitly conditioned his September rally call on "if the Fed holds."
Reading list
24 Aug – 7 Sep
For the DCA plan
Composite 4.36 — frothy / hold dry powder. Credit is the tripwire: it goes first.
watchHY spreads widening past 500bps alongside an equity drawdown → staged deployment: a tranche at −10%, more at −15/−20%, the bulk at −20%+ with spreads confirming. Currently 265bps and tightening.
