The US equity market is currently experiencing choppy conditions, with liquidity being worse than the previous day. The composite volume is down by 22%, which is a significant drop compared to the 20-day average. Despite this, single stock dispersion remains elevated, with earnings and conference calls being a major contributor to this trend. Macro players are also on the sidelines, resulting in subdued ETF activity.

In terms of yields, they have been rising due to mixed labor market signals. However, there has been a slight decrease in December cut expectations, as unemployment claims fell to a 3-year low. This is a positive development, indicating that the job market is improving. Additionally, layoff plans for November showed a year-over-year increase, but a reassuring decline on a month-to-month basis.

Cyclicals are outperforming defensives once again, with growth stocks making a notable comeback. The UBXXVOLT Index has gained 3%, while the Speculative Growth basket has rebounded by 5%. This is a positive development, as it suggests that investors are becoming more optimistic about the growth outlook. Mag 7s are also performing better, which is a welcome sign.

In terms of specific stocks, there is evidence of a reversion in the recent TPU vs GPU trade. OpenAI names such as NVDA and ORCL are acting well, while GOOG is taking a breather. This is a positive development, as it suggests that investors are becoming more cautious about the risks associated with this trade. META strength is also a focus, as it continues to be a key driver of growth in the market.

In terms of investor sentiment, hedge funds are 63/27/10% (Buy/Sell/Sell Short) better to buy. This is a significant improvement from recent weeks, as hedge funds have become more optimistic about the market outlook. Long only flow is also balanced, indicating that investors are taking a neutral stance towards the market. Short activity remains subdued, which is a positive development given the high levels of uncertainty in the market.