Category: Daily Instagraph

Today’s chart shows the S&P 500 trading at 5.3x book value – the highest level since WWII. Many investors question how useful book value still is as a yardstick. With the rise of technology and services, businesses have become less capital-intensive, while years of M&A have filled balance sheets with goodwill and other intangibles that … Continued

Today’s graph compares inflation-adjusted public pensions per head with compensation per employee. Across Europe, public pensions have risen significantly faster than salaries. In particular, countries hit hardest by the Eurozone crisis — such as Greece, Italy, and Spain — have seen stagnating or even falling wages. Interestingly, the burden of internal devaluation to regain competitiveness … Continued

Germany’s economy has clearly lost competitiveness. Over the last 25 years, GDP growth has been modest and recently even turned negative. One major reason: private capital investment increased by only ~15%, while government consumption surged by ~60%. When the State expands and private investment stagnates, productivity and competitiveness inevitably suffer.

Today’s graph from Crescat Capital LLC highlights a stark divergence: large-cap US tech has sharply increased its capital investment since COVID, while the broader US mid-cap universe — representative of the real economy — has cut CAPEX by roughly 30% vs. pre-pandemic levels. One can argue that Big Tech may be flirting with over-investment in … Continued

Europe needs to spend more on defence, and the political will is now clearly translating into actual numbers. The European Commission’s €800 billion “Readiness 2030’’ programme even allows temporary exceptions from fiscal rules — a major shift in mindset. In addition, Europe announced €150 billion in EU defence loans (“SAFE”). Germany suspended its constitutional “debt … Continued

The US market as a whole is expensive — both relative to its own history and compared to the rest of the world. But does that mean we should avoid US equities entirely? At ECP, we don’t think so. We continue to allocate capital to US equities, with one important caveat: we now invest much … Continued

Today’s chart is a simple but striking reminder of how concentrated global equity markets have become. The market cap of the 10 largest US companies now stands around $24.5 trillion — larger than China’s entire GDP. Even more telling, the top five US tech names alone are worth roughly $17.6 trillion, which is more than … Continued

A historic move yesterday: the S&P 500 opened up 1.4% and finished down 1.5%. Such intraday reversals are extremely rare — the last comparable ones occurred on Liberation Day and during the Covid crash. NVIDIA’s excellent results were not enough to calm markets. Some investors viewed the numbers with suspicion, others simply took profits, assuming … Continued

NVIDIA delivered solid results and an upbeat outlook yesterday after the close, reassuring investors and lifting the share price by about 5% in late trading. Third-quarter numbers were again impressive: revenue rose 62% to USD 57 billion, ahead of expectations. The company now guides for roughly USD 65 billion in sales for the January quarter. … Continued

As the saying goes, you only know it’s a bubble when it bursts. What we can say today is that valuations appear stretched in certain parts of the market, notably within the AI segment. At the same time, valuations alone remain a poor timing tool — and unlike during the Internet bubble, today’s tech leaders … Continued