The A.I. frenzy belies caution beneath the surface in equities.

Or so said Barclays analysts led by Emmanuel Cau. Key investor cohorts are neutral stocks, hedged on the downside, overweight cash and underweight cyclicals, the bank said, adding that thanks to still-low realized vol, systematics are the main buyers.

The good news on the discretionary side is that cash overweights are “dry powder,” so to speak, but as BofA’s Michael Hartnett pointed out recently, your dry powder now pays you 5%, which is a disincentive to indulge your worst “FOMO” instincts.

In the context of a US equity market that wants to breakout, it’s worth noting that more company insiders have bought shares over the last four weeks than any other month since March of 2020, during the original COVID panic. You could fairly argue that corporate selling has likewise gathered momentum, but as Bloomberg’s Elena Popina noted Wednesday, the insider sell-to-buy ratio is the lowest in a year.

Of course, interpreting executive buying and selling isn’t straightforward but ostensibly, the lower the ratio, the more confident management is in the prospects for business and the broader economy.

At the least, it’s another counterpoint to dire warnings about margin compression. In the past, the same ratio was reasonably prescient, falling during selloffs which looked like buying opportunities in hindsight.

And yet, no one should underestimate the chances that a recalcitrant Fed spoils the party. Over the past two decades, investors became accustomed to a Fed more inclined to spike the proverbial punch bowl than take it away. That’s changed.

Headed into this week’s key labor market updates, pricing for the June FOMC meeting put the odds of another hike at around 66%. In an interview with the FT, Loretta Mester said, “I don’t really see a compelling reason to pause.”