Category: Daily Instagraph

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

Japan’s 20-year bond yield has surged to 2.78%, the highest in more than 25 years, as markets question the government’s massive stimulus package and its impact on an already heavy 263% debt-to-GDP burden. Expectations that these plans may require a more dovish BOJ are adding to the sell-off in JGBs. A key risk now is … Continued

We start the week with our regular look at global equity valuations. The message remains broadly unchanged: US large caps continue to trade at elevated levels, both versus their own long-term history and compared to the rest of the world. What is noteworthy is that even when excluding the US tech sector, valuations for US … Continued

US consumers remain unusually depressed: confidence has fallen to levels typically seen only during recessions. This is puzzling at first glance — unemployment remains low, and equity markets have held up reasonably well in USD terms this year (think positive wealth effect). Beneath the reassuring headline data, households are feeling the strain. The combination of … Continued