Category: Daily Instagraph

The hawkish policy by the Fed, the higher rates and the US regional banking crisis last year in the US took their toll on bank credit. It is only the second time over the last 50 years that total bank credit in the US is contracting. Credit contraction will act as an economic brake and … Continued

Chinese stocks have now fallen to 5 years low based on the 3 major market indices measuring their performance. Judged in dollar terms the Chinese GDP has started to decline for the first time over the last 30 years. A disappointing recovery post-Covid, overleverage leading to a property crisis, government interference in the private sector … Continued

Since the financial crisis in 2008, small cap value stocks outside of the US have underperformed large cap US growth stocks by a stunning 80%. If the bursting of the Internet bubble and the subsequent rally of value is any guide, this will eventually change, creating a substantial investment opportunity for patient investors who can … Continued

The recent Red Sea after attacks by Houthi rebels are in geopolitics what Donald Rumsfeld, Secretary of Defence under the Ford and Bush junior administrations, famously called the “unknown unknowns”. The Suez canal handles about 12% of global trade. Rerouting shipments around the Cape of Good Hope adds about 3,000-3,500 nautical miles (6,000km) to journeys … Continued

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