Category: Daily Instagraph

Since the recent peak, US technology stocks are down only around 2%, yet valuations have corrected much more meaningfully. The adjustment has therefore taken place through multiple compression rather than price declines, while earnings continue to grow. In effect, fundamentals are catching up with valuations. With the spread now close to -26%, a significant part … Continued

Capex at large tech companies has clearly taken off. A growing share of EBITDA is being reinvested into AI infrastructure, while the rest of the companies remain broadly flat. This is the key point: we have moved into an investment phase. The strategic logic is clear — AI will require massive upfront spending. The question … Continued

The dominance of the “Magnificent 7” has defined recent market performance, but the relationship with the broader market is starting to shift. The 100-day correlation between the S&P 500 Equal Weight Index and the Magnificent 7 has recently turned negative again, meaning mega-cap tech and the rest of the market are moving in different directions. … Continued

Since the announcement of Warren Buffett’s retirement in May last year, Berkshire Hathaway has underperformed the S&P 500 by roughly 40%. This relative weakness comes despite a succession that, in our view, is built on continuity rather than disruption. Greg Abel, now at the helm, has worked alongside Warren Buffett for more than 25 years, … Continued

Today’s chart highlights a recurring pattern in equity markets: periods of elevated concentration. The Nifty Fifty in the 1970s (~40% of the S&P 500), Japan in the late 1980s (~44% of MSCI ACWI), and Tech in 2000 (~41% of the S&P 500) all reached comparable levels. Today, the largest AI-related stocks are again approaching ~40% … Continued

Inflation in the Eurozone is going to remain above the ECB’s 2% target across all three scenarios. In a severe case, it may even shoot above 6%. This reinforces the current dilemma for central bankers. The recent inflation spike is largely driven by energy and geopolitical tensions linked to the Iran conflict — in other … Continued

US and European equity markets have now fully retraced their losses since the beginning of the Iran conflict. Oil, however, tells a different story, still trading roughly 27% higher. This divergence is striking given that the Strait of Hormuz — a critical artery for global oil and gas flows — remains partially constrained, and geopolitical … Continued

Amid the justified excitement around AI and the power of innovation, it is worth remembering that technological progress inevitably brings disruption at the company level. Today’s perceived leaders are not guaranteed to remain tomorrow’s winners. History offers clear reminders. Railway companies once dominated markets before fading. More recently, Kodak and Polaroid—both pioneers in their fields—failed … Continued

Markets cheered yesterday’s temporary ceasefire with Iran and the announced reopening of the Strait of Hormuz. However, the situation remains fragile, particularly given ongoing tensions in Lebanon. More importantly, normalization of trade flows will not happen overnight. According to JP Morgan, it may take up to three months for tanker traffic to return to normal … Continued

Oil is moving back toward $90 following the announcement of a temporary ceasefire between the US and Iran. Brent is down around 13%, unwinding much of the geopolitical risk premium. Markets are reacting quickly: Nikkei +5% this morning, European equity futures +5.2%, and S&P 500 futures +2.4%. US 10-year yields are down 5bps to 4.24%, … Continued