Category: Daily Instagraph

US fiscal policy is clearly on an unsustainable path. Twin deficits — both fiscal and trade — are weighing on confidence. Net interest costs are elevated, borrowing now finances over a quarter of government spending, and the term premium continues to rise. Markets remain calm for now, but stress could surface quickly, particularly if Treasury … Continued

It’s been a full roundtrip for US large-cap equities this year. As the graph shows, the rebound of US equities is more broad-based. Even when excluding the so-called Magnificent Seven, US large caps are back at new highs. But let’s not forget the bigger picture: despite the rebound, US equities still lag global markets by … Continued

As today’s chart shows, only 10% of NYSE trading is now driven by active managers — down from 80% in 1995. At the same time, more than half of global equity assets are now passively managed. This shift goes against a cornerstone of our philosophy: that stock prices should reflect the fundamentals of the businesses … Continued

For those just back from a long vacation without access to news — welcome. Here’s a quick catch-up in two charts. Trump’s shock-and-awe approach on tariffs seems to be delivering, at least if you judge by market signals. The USD has weakened meaningfully, down more than 11% year-to-date against the euro, now trading below 0.86. … Continued

Since the introduction of a baseline 10% US tariff in early April, manufacturing PMIs across developed markets have surprised to the upside. As Bloomberg’s John Authers notes, global industry seems — at least on the surface — to be absorbing the shock. Stockpiling may explain part of the resilience, but inflation has remained contained, and … Continued

Oil prices dropped sharply following Trump’s surprise ceasefire announcement on Truth Social after Iran’s limited strike on a Qatari air base. While it’s too early to say the conflict is resolved, the message is clear: for now, no side appears to be pushing for further escalation. Markets responded swiftly — oil slumped, equities rallied. Once … Continued

Swiss watch exports fell nearly 10% in value in May. The biggest market, the U.S., was down 25% in value and China, the second biggest market, was down 17.4%. What also stands out: it’s the wealthiest consumers who pulled back the most, with high-luxury watches down 17.1% according to the report. These products serve the … Continued

According to the latest BofA Global Fund Manager Survey, institutional investors are now the most underweight the US dollar in 20 years. The reasons are well understood: rising political uncertainty, persistent US twin deficits, and a growing shift by central banks away from the dollar as a reserve currency. Year-to-date, the USD has already lost … Continued

US exceptionalism continues to be challenged — not just geopolitically, but also in financial markets. According to the widely followed Bank of America Global Fund Manager Survey, fewer than one in four institutional investors now expect US equities to be the best-performing asset class over the next five years. Instead, 54% see international stocks leading … Continued

Foreign investors now hold a record share of long-duration US Treasuries — with over 14% of their holdings in maturities beyond 10 years. This reflects both a search for yield and a continued belief in the safety of US government bonds, despite growing concerns over fiscal sustainability and political polarization. At ECP, while we follow … Continued