Category: Daily Instagraph

Over the last week market sentiment has radically changed. Markets are back to worrying about a hard landing and a policy mistake by the Fed. Bond markets are now implying a 94% chance of more than 3 rate cuts of 25 bps in 2024. Latest US economic data, namely unemployment data and ISM survey, came … Continued

Contrary to what we typically learn in business school, long-term interest rates in the US have significantly declined, yet global equity markets are experiencing a downturn. The US 10-year Treasury yields have fallen below 4%, with swap traders now fully anticipating three rate cuts this year. This shift is driven by growing investor concerns over … Continued

Based on yesterday’s Federal Reserve meeting, while there hasn’t been a move yet, the likelihood of a rate cut in September is high. A compelling study from Goldman Sachs examines the typical behavior of the S&P 500 following the first rate cut, drawing on data from 1984 and analyzing eight Fed cutting cycles. Over the … Continued

A comprehensive study examining 29,078 publicly traded U.S. companies from December 1925 to December 2023 reveals a surprising finding: 51.6% of these companies resulted in losses for their investors. Despite this, the average return across all companies was 22,840%, largely driven by a small number of exceptional performers. Notably, 17 companies achieved total returns surpassing … Continued

Over the next two days, the Bank of Japan, the Federal Reserve, and the Bank of England will convene to determine their monetary policies. According to Bloomberg’s World Interest Rates Probabilities function, which calculates implied policy rate probabilities from futures and swap prices, financial markets anticipate rate cuts this year for all except Japan. A … Continued

In the US, investors are currently rotating their equity portfolios out of technology Mega-tech and into small-cap stocks. Notably, the Russell 2000 has outperformed the Nasdaq by 13% in July so far. However, this growing appetite for small caps has not reached Europe. In Germany, for instance, large-cap stocks are still outperforming the MDAX, which … Continued

There is extensive press coverage currently on the so-called Trump trade. Indeed, there has been a notable shift into sectors expected to benefit from Trump’s policies, such as financials, industrials, and energy, and away from sectors perceived as vulnerable, like technology. Additionally, the dollar might strengthen due to more isolationist policies and potential higher inflation. … Continued

In 1989, at the peak of Japan’s economic bubble, the country represented 12% of the global GDP yet commanded 48% of the global market cap. Today, the US accounts for 18% of global GDP but dominates with 70% of the global market cap. Remarkably, the top 15 stocks in the US have a higher market … Continued

Semiconductor stocks faced a challenging week, with major US chip manufacturers Nvidia Corp., Advanced Micro Devices Inc., and Broadcom Inc. contributing to a nearly 7% decline in a key semiconductor index yesterday—the steepest drop since 2020. In Europe, ASML Holding NV plummeted 11% on Wednesday despite reporting robust orders. The primary factor behind this downturn … Continued

It’s all a matter of perspective: the combined value of the “Magnificent 7” stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—dwarfs major global equity markets. These companies are worth twice as much as the entire Chinese equity market, 2.5 times more than Japan’s, three times more than India’s, nearly five times more than France’s, and … Continued