Category: DAILY INSTAGRAPH

The total return equity investors are achieving is composed of earnings growth, valuation change, dividends and forex change. Over the last ten years, the annual return in the US was 2 times higher than the one in Europe ex UK and Japan. According to the below analysis from Schroders, the interesting point is that this … Continued

Our base scenario at ECP remains that central banks are done raising interest rates and have been successful in the fight of inflation. However, history has shown that in some occasions, inflation comes back with a vengeance after an initial fall like shown below for the US. What could provoke a return of inflation this … Continued

Time to take a look at valuations of global equity markets in Jan 2024. Here the glass looks half-full. On the one hand, the US and MSCI World are close to or at the 10th highest valuation in terms of forward price earning for the last 20 years. This is not surprising due to the … Continued

As shown yesterday, our first investment theme for 2024 is the normalisation of interest rates. With falling inflation numbers in Q4 last year, financial markets have been quick at discounting rate cuts by the central banks. While we believe that central banks have indeed done their job and will start cutting rates in 2024, we … Continued

First let me wish you in the name of the whole Team at ECP a happy New Year with a lot of success in all your endeavours and a good health. In the first 2024 editions of our daily column, we use the opportunity to provide the main highlights of our current house view. The … Continued

Today’s graph from Goldman Sachs is a little present for central bankers to put under the Xmas tree. It shows indeed that their restrictive monetary policies by raising rates aggressively have shown effects. Core inflation, excluding the most volatile parts of inflation like energy, in the G10 countries ( ex Japan ) and DM markets … Continued

As of 19th of December, the S&P 500 is up 24.2% this year. Far from a broad rally, this market rally has been exceptionally concentrated this year on a couple of stocks. 71% of stocks have indeed been underperforming the index, the highest number on record. For 2024, investors need to remember that exceptional events … Continued

Yesterday stocks and bonds rallied after the Fed signalled interest rate cuts coming up next year. The Fed dot plot signalled 75 bps reduction of interest rates coming in 2024, a sharper fall than forecast a month ago. This morning futures in Asia and Europe are all up. We would not be surprised other central … Continued

Global benchmark brent trades near 73 USD per barrel, back to levels of June 2023 and 23% down since the peak in September. But hang on: we have a geopolitical polycrisis and OPEC is maintaining its production cuts at a moment where the US economy remains relatively resilient. Are less oil demand out of China, … Continued

If your time horizon while investing in the stock market was only one day, the probability of a loss in US equities was statistically 46% over the last 100 years. This is almost the same probability than tossing a coin and a random choice between a gain and a loss. If your investment horizon increased … Continued