Category: Daily Instagraph

Since the financial crisis, European stock-markets have dramatically underperformed their US peers. Multiple reasons for this: a lack of technology companies, structural & political issues and, last but not least, a European debt crisis in 2009. It is worth highlighting that European stocks have not always been performance laggards. In the 2 decades from 1989 … Continued

As second theme of our quarterly house-view we expressed our opinion that central banks arrive to end of their rate hiking cycle. Question now becomes when central bankers are going to cut rates. Here, the Fed Chair Jerome Powell was as clear a central banker can be yesterday stating that a March cut was “not … Continued

One of the newcomers in our European Value Fund in Jan 2024 is the Swiss small-cap Zehnder, a leading player in European radiator and ventilation markets. This family-owned business is shifting its business away from the commoditized radiator business into innovative heating, cooling and air purification solutions, all segments with attractive growth rates. We think … Continued

The historical average performance of the S&P 500 in US presidential election years since WWII gives a recomforting picture as, on average, markets were up about 7%. Markets started to react positively to the election campaign from March in the election year, with Democratic Presidents being better received by Mr Market than their Republican counterparts.

The old saying goes: “You do not buy insurance when your house is on fire.”. Investors currently judge the risk of a market correction as very low, at least when looking at the derivatives market. The current cost of insurance of a 3 months 95% S&P 500 put stands currently at 0.82 bps, the lowest … Continued

We have been expressing in our quarterly house view our belief that we would not see a ‘hard landing’ of the US economy at the current stage. It is a fluid situation where things can evolve quickly. However, in a presidential election year, the US economy continues to surprise to the upside as shown by … Continued

The German Wirtschaftswunder has lost some of its shine, and this already before the Ukraine conflict. This can be seen in the drop of industrial production that is back to 2012 levels. We see different reasons: 1/ an economy overly reliant on its car industry that has missed out on the EV trend 2/ the … Continued

We have been arguing earlier this year in our house view that expectations going into 2024 for rate cuts were high. We believed there was a divergence between central banks and markets expectation over the number and pace of rate cuts in 2024. In the meantime, market have started to adjust. The yield on the … Continued

Imagine you had a mandate to invest the modest sum of 5.8 trillion USD into a maximum of 2 positions. 2 options: You can either take over Apple and Microsoft or take over the whole of Japan Inc and keep 1.5 trillion USD in cash to pursue other activities. Indeed, Apple and Microsoft combined are … Continued

Valuation matters, at least it has always in the past. According to the work of Yale professor Shiller, there is indeed a strong correlation between the attractiveness of equities relative to bonds and their subsequent 10 year return. The attractiveness of equities is measured here by normalised 10 year earnings yield minus the 10 year … Continued