Category: Daily Instagraph

Something interesting is happening beneath the surface of the US equity market. The correlation between the traditional S&P 500 and its equally weighted counterpart has fallen to just 0.38, the lowest level in more than 35 years. Not even during the dot-com bubble did the two indices diverge so dramatically. And the performance numbers tell … Continued

Last week’s sell-off was sharp, but importantly, it was not broad-based. Technology and energy bore the brunt of the correction, reflecting growing doubts about the pace of AI infrastructure investment and hopes of an end to the conflict in Iran. Five of the eleven S&P 500 sectors nevertheless managed to advance. The political message from … Continued

The recovery in European equities has been driven to a large extent by higher valuation multiples, but earnings growth has also contributed. Excluding energy, MSCI Europe earnings per share are expected to grow by some 15% in 2026, while the market trades at around 14.2 times forward earnings. With interest rates normalising, this does not … Continued

The concentration of the US equity market has reached extraordinary levels. The five largest companies in the S&P 500 now represent approximately 31% of the index, equivalent to the combined weight of the smallest 434 constituents. This extreme concentration is a double-edged sword for investors. For active portfolio managers, not owning these companies while the … Continued

Bloomberg’s chart illustrates the extraordinary scale of the AI investment boom. Anthropic, the company behind Claude, is preparing an IPO that could raise as much as $100 billion, surpassing SpaceX’s previous record of approximately $86 billion. Three observations come to mind. First, this reflects the genuine commercial value of Claude. Anthropic generated $16.3 billion in … Continued

What matters most in oil markets is not today’s spot price, but what traders are pricing twelve months ahead. The 12-month Brent futures price has moved towards USD 90 per barrel, its highest level since the aftermath of Russia’s invasion of Ukraine in 2022 and above its spot price. Gasoil prices have risen even more … Continued

Another interesting analysis shared by André Huwiler, based on 155 years of Robert Shiller’s US market data, suggests that equities have historically delivered lower returns during periods of rising bond yields than during periods of declining yields. At first glance, this makes sense. Lower rates mean cheaper financing for companies and lower discount rates for … Continued

Yesterday, we looked at how France historically dealt with excessive public debt: through inflation. Todays chart shows that financial markets are becoming increasingly concerned about Frances ability to manage its debt within the constraints of the euro. The yield on French 10-year government bonds has climbed to 4.93%, compared with 3.40% for German Bunds. The … Continued

An interesting chart from Costa Vayenas, author of The Swiss Franc, 1798–2055, tells us a lot about France’s economic history — and potentially its future. For much of the last century, France had a relatively simple way of dealing with excessive debt and economic imbalances: inflation and currency depreciation. After both World Wars, inflation helped … Continued

Earlier this week, we showed how earnings growth has done the heavy lifting for US equities. Our portfolio management intern, Maxence Brands , has run the same analysis for Europe. The picture is quite different. Since October 2022, the STOXX Europe 600 has gained around 65%. But much of that performance came from valuation expansion … Continued