Category: Daily Instagraph

Any investor who is currently positioned for higher long-term rates is clearly betting against consensus. According to the latest BofA Global Fund Manager Survey, two thirds of the interviewed fund managers are now expecting lower long-term rates. This is the highest percentage in 2 decades. To us, the ones shorting long-term bonds currently are either … Continued

While many are enjoying a crispy turkey across the Atlantic today, plates in Germany will probably be pretty empty going forward. The judgement by the German Constitutional Court on the budget tricks made by the government was the last nail on the coffin for hopes of strong economic growth in 2024. Dependence on Russian energy, … Continued

European equities currently trade at 20 times cyclically adjusted earnings, one of our preferred valuation measures as it uses the 10 year average historical earnings and hereby levels out short term earnings swings due to economic swings. This valuation is not only below the 40 year average but also compares to a valuation of 30 … Continued

European small cap stocks are now trading at the biggest discount to Europe large caps in 20 years. This was not always the case. In fact, small caps traded historically at a 15% premium in terms of Price-to-earnings ratio due to their better earnings growth profile. We draw 2 conclusions: 1/ It is not only … Continued

Shorting equities outside of the US and going long the S&P 500 was one of the best trades of the last decade. While the relative underperformance of the stocks outside of the US continues for now, we would warn investors arriving late to the party that the undervaluation of the ROW stocks is now such … Continued

Sick and tired of the daily ups and downs of the stock market ? Take some historical perspective. Over the last 100 years, the compounded annual return of the US stock market was 10.8 ! 1000 USD invested in 1920 became 29 mil USD today through Black Friday, WWII, Bretton Woods, 9/11, a bursting Tech … Continued

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