Category: Daily Instagraph

The equity rally of Tuesday was one equity investors would not have wanted to miss this year. The ones who by choice or mistake were out of the market that day will have difficulties to outperform this year. This shows again how difficult it is to time the market correctly. Taking the risk of missing … Continued

The US CPI figure of 3.2% for October that came out yesterday clearly shows inflation has cooled and confirms our belief that the Fed is close to having done its job in rising rates. Prices of all components of the inflation figure, except transportation and shelter, have been falling from the 40-year high reached last … Continued

Housing prices in Germany are declining sharply, not only compared to the rest of the EU but also in absolute terms. The German housing market appears to be most sensitive as demand for new constructions diminishes due to the end of cheap credit and unaffordability of new constructions due to the rise in raw material … Continued

Over the weekend credit rating agency Moody’s has cut the outlook on US government debt to negative. We know since the GFC that rating agencies tend to be behind the curve in their assessments. However they appear to wake up to the fact that that risks to fiscal strength of the US rise “with higher … Continued

While investors chew on the latest quote from Fed Chairman Powell : “If it becomes appropriate to tighten policy further, we will not hesitate to do so”, we wanted to stress that worldwide economies have been outperforming even the most optimistic expectations in 2023. A year ago, consensus for global real economic growth ( read … Continued

A closer look at US nominal interest rates over the last 2 centuries confirms that the current bond yields represent a “normalization” as they are now back to the long term historical average. There remains a risk they could go higher if inflation becomes sticky and taking into account structural factors like the high sovereign … Continued

The historical performance of the S&P 500 in the months after the last rate hike of the Fed is shown in today’s graph. In 4 out of 5 cases over the last 50 years, US equity markets reacted positively during the year following the plateauing rates. This is a ray of light for the investors … Continued

Economic confidence in the US is currently lower than during the pandemic and almost as low as during the financial crisis in 2008. This could be of relevance to investors as the outcome of US presidential elections matter one year away from the vote. Remember the quote “It’s the economy, stupid.” by James Carville, the … Continued

The European corporate bond market has one fundamental difference to the US. European companies are facing a wall of maturing debt during the next 3 years. The percentage of outstanding high yield bonds with a maturity of up to 3 years is above 40%, about twice the % seen in the US. This means that … Continued

The Fed left its benchmark rate unchanged yesterday indicating that the recent rise in longer Term Treasury yields and the overall economic situation hints towards an end of its tightening cycle. Meanwhile, inflation in the Eurozone falls to a 2 year low in October. European economies are shrinking now with a Eurozone PMI in recession … Continued