Category: Daily Instagraph

As commented in previous daily’s, only 11% of the US household debt is currently on variable interest rates. Hence the US consumer is not yet very sensitive to higher interest rates. Not yet: there is indeed substantial pain ahead looking at interest rates for example on new credit card loans, personal loans and car loans. … Continued

The oil price has made a comeback and is up 24% since its 2023 lows during Mid-March. This should not come as a surprise as world economies prove resilient with sustained demand despite the rate hikes by central banks. Production cuts by the biggest suppliers like Saudi Arabia limit supply. There is currently no buffer … Continued

Bill Ackman from Pershing Square announced to short the 30-Year US Treasury in size as he expects yields to hit 5.5% as structural changes will lead to higher levels of long-term inflation. These would include de-globalization, higher defence costs, the energy transition, growing entitlements, and the greater bargaining power of workers. He thinks it would … Continued

The 10 year US government bond yield is back to 4.1%, up from 3.3% at the beginning of April. The surprise rating downgrade by Fitch of the US Sovereign Bond Rating to AA+ from AAA is hitting investor sentiment further as Fitch mentions as reason for the downgrade: “the expected fiscal deterioration over the next … Continued

Only 11% of the US household debt is currently on variable interest rates. Therefore the US consumer is currently not very sensitive to higher interest rates when paying down his mortgage debt, auto and student loans. The ones really impacted are the ones contracting new loans or renewing existing ones. The pain of the interest … Continued

European equity markets now trade at a record 34% discount compared to the US in terms of 12 months forward Price-to-earnings ratio. The average discount over the last 25 years was 13%. Pre-Covid it was around 20%. This year the discount has grown as the US multiple has increased by 18% while the European multiple … Continued

The US is building up new factories at an unseen speed: the construction spending for manufacturing is surging and has doubled since 2021. This is mainly due to supportive policies implemented by the government in the form of direct funding and tax incentives. The boom is driven by construction of computer, electronic and electrical manufacturing. … Continued

With the public school holidays having started in Luxembourg, time for a less (economically) serious Daily Instagraph. In France, overall wine sales have seen a downward trend in volumes over the last 25 years. On the one hand, volumes of red wine sold have halved. On the other hand and surprisingly, Rosé is no longer … Continued

We take note that investors globally have “parked” more money than ever in bonds and cash over the last years. At the same time, money has been taken out of global equities, especially since the recession/inflation narrative took hold over the last year. With such a positioning, the slightest change in the economic environment towards … Continued

Inflation in the US is cooling down. CPI for June came in at 3%, lower-than-expected, a two-year low and one-third of the level it reached a year ago. Core inflation, excluding volatile food & energyprices, is also coming down. Without wanting to cry victory too soon as there is a positive ‘base effect’ in these … Continued