Category: Daily Instagraph

One of the most followed leading economic indicators is the Manufacturing PMI, an index measuring the month-over-month change in economic activity within the manufacturing sector, the most cyclical part of the economy. Here Spring appears to be coming with the global, US and Chinese PMI’s increasing and now in expansion territory (above 50). This is … Continued

Imagine you had invested 100 USD in 1988 in the US stock market. By attempting to outsmart Mr Market and based on your true market insight, you completely exited the market at certain points. Imagine you got it completely wrong: the cost of missing the best day, the best week, the best month, the best … Continued

Another one of the 6 investment themes we put forward in our Q2 house view is that valuations globally are high with however some under-valuated pockets in selective sectors and geographies. A good example of a region fallen totally into disgrace with investors is Europe. Since the financial crisis, never has the valuation discount of … Continued

At least two of our 6 investment themes we provided at the beginning of the year will also make it in our Q2 house view. One prediction in December 2023 was a slowing economic growth but no hard recession. 3 months later, economic data around the world remains stronger than most economists had foreseen as … Continued

CAPE, the cyclically adjusted price-to-earnings ratio, remains a good valuation measure as it smoothes the earnings of the companies over the business cycle (10 years). On this measure, valuation of the US equity market is back to its peak reached after the financial crisis and almost as high as it was during the Internet bubble. … Continued

Since the beginning of 2024, the number of corporate defaults by European issuers has been the highest since the financial crisis. We understand that this is mainly due to the real estate sector where the higher interest rates are biting and prices/volumes are under pressure. Unfortunately, this is only the start as companies have not … Continued

The US Treasury is entirely relying on short term bonds for the issuance of new debt. This is typical for periods of crisis like the financial crisis or the Covid pandemic. The US yield curve is still inverted with the 3 months yield at 5.32% and the 10 year bond yield at 4.24% We can … Continued

NVIDIA is being celebrated in the stock market as a key beneficiary of artificial intelligence. The stock price is up another 90% y-t-d and up twentyfold over 5 years. On the dark side, the outsourced customer centre operator Teleperformance is being hammered by Mr Market as having a business model broken by artificial intelligence as … Continued

Here is an update on valuations before the weekend after the good performance y-t-d of the main global stock markets. In terms of 12 months forward PER ratio, the US is overvalued even when excluding Big Tech. The main other developed markets are now slightly above their median 20 years valuation but still within the … Continued

Unlike the historic decision by the Bank of Japan earlier this week to move to positive rates for the first time in 8 years, there was nothing surprising coming from the US central bank yesterday. The Fed still signals 3 rate cuts for 2024 and moved toward slowing the pace of reducing their bond holdings. Both … Continued