Category: Daily Instagraph

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

We initiated in March a position in Dassault Aviation. The French aerospace group currently enjoys a record backlog of close to 8 years in sales providing the company good visibility on future sales with record new export orders on its Rafale fighter. Alone, its 26.5% stake in the defence electronics and electronics group Thales is … Continued

The copper price has been rebounding 11.4% since mid-October last year. This is a good sign as copper is often considered as Dr Copper taking the temperature of the global economy. If demand is strong and prices increase, global manufacturing activity is picking up as demand for industrial commodities increases with more copper needed for … Continued

Is the chocolate Easter bunny under threat? Major African cocoa plants in Ivory Coast and Ghana stopped or cut processing because they cannot afford any longer to buy beans. Cocoa future prices are up 170% over one year. The weather is the culprit there have been three years of poor harvests, with now a fourth … Continued