Category: Daily Instagraph

One of the most striking market shifts of the past weeks is happening in interest-rate expectations. Back in February, markets were still pricing close to three Fed rate cuts by mid-2027. Today, those cuts have almost entirely disappeared. The reason is geopolitical. Higher oil prices linked to the Iran conflict are feeding directly into inflation … Continued

“It’s the economy, stupid.” More than 30 years after Bill Clinton’s famous campaign slogan, the phrase still defines American politics. Wars, geopolitics and political noise matter, but US voters ultimately judge presidents on one thing: their own financial situation. This is exactly what current polling shows again. According to recent Economist / YouGov data, the … Continued

The valuation gap between US and European equities has widened again to levels rarely seen over the last 15 years. The S&P 500 now trades at around 21x forward earnings, versus roughly 14x for the Stoxx Europe 600. As Charles-Henri Monchau rightly points out, Europe may look optically cheap, but markets are increasingly questioning whether … Continued

Expected EPS growth for the S&P 500 over the next 12 months now stands at 18.6%, driven overwhelmingly by three sectors: technology, materials and energy. In tech, the engine remains the massive AI-related CAPEX cycle, with hyperscalers investing aggressively into infrastructure and computing power. In energy and materials, geopolitics, supply constraints and higher commodity prices … Continued

Financial markets react to the fact that the Iran conflict is unresolved as hostilities continue. Brent futures for year-end are moving back toward $95 this morning, and the whole curve has shifted higher. What stands out is the lack of reaction in equities. Despite higher oil and rising inflation expectations, US stocks remain near highs. … Continued

Berkshire Hathaway is now sitting on close to $400bn in cash. Put differently, this is enough to buy almost any company in the S&P 500 — 478 of the 500 companies are smaller than Berkshire’s cash pile. In Europe, this war chest would also allow Berkshire to take out names like LVMH, Volkswagen and Sandvik … Continued

The gap between profit margins and free cash flow is increasingly linked to AI capex. Large technology companies are investing heavily in infrastructure—data centers, chips, and energy—to support AI. This is starting to show in the numbers: earnings remain strong, but free cash flow is under pressure as cash is reinvested. In that sense, parts … Continued

The UAE’s exit from OPEC weakens the cartel structurally, but markets are focused elsewhere: the Iran conflict and the Strait of Hormuz. The impact is already visible. Inflation expectations are rising and rate expectations have shifted sharply. US rate cuts this year are no longer expected by investors, while investors are pricing two hikes by … Continued

Is the market right to look past the conflict in Iran? With Brent at $108 and risks around the Strait of Hormuz, the concern is real. But as John Authers writes in Bloomberg Opinion, the more structural driver remains earnings. 12 months forward profits have been revised up by roughly $600bn in four months (+12%), … Continued

The Strait of Hormuz highlights a clear asymmetry: the US is largely insulated, Europe moderately exposed, and Asia highly dependent—China and India most of all. As political economist Shirley Ze Yu argues, China is caught in a trilemma it cannot escape: it cannot afford an Iranian victory, it cannot afford an Iranian defeat, and it … Continued