Category: Daily Instagraph

Something unusual is happening in European bond markets: French 10-year yields are now trading at the same level as Italian ones. Traditionally, investors demanded a clear premium to hold Italian debt, but this gap has disappeared. The reasons are twofold. France is struggling with political fragmentation, rising deficits, and repeated leadership changes. Italy, on the … Continued

For the first time since 1996, foreign central banks now hold more gold than U.S. Treasuries. This is not only a story about gold — it reflects waning confidence in U.S. sovereign debt. The U.S. faces persistent twin deficits (budget and current account), rising debt levels, and questions about long-term fiscal discipline. While the de-dollarization … Continued

There are now more equity ETFs listed in the US than listed US companies. ETFs seem to have become a very profitable business for Wall Street, despite their low fees, and often go beyond simply replicating the market. At ECP, we see ETFs as useful tools for building diversified portfolios. But we also believe that … Continued

What are the biggest tail risks keeping fund managers awake at night? According to the latest BofA Global Fund Manager Survey, it is not equity market valuations, nor the fear of an AI bubble. It is not even the risk of an imminent recession. The number one concern today is a second wave of inflation … Continued

As the saying goes: “You only know if it was a bubble once it bursts.” Looking at NVIDIA today versus Cisco during the Internet bubble highlights the difference between multiple expansion and earnings growth. Cisco’s share price in 2000 surged far ahead of earnings that never materialized, leading to a painful collapse. NVIDIA, by contrast, … Continued

As we have repeated many times, US equity market valuations remain stretched — both compared to their own history and versus the rest of the world. For now, investors seem comfortable with this premium as earnings growth of US companies, particularly in technology, continues to deliver. US exceptionalism and the AI revolution remain the driving … Continued

Time to revisit equity market valuations. At ECP, we recognize that valuations may not dictate short-term market moves, but they remain a key driver of long-term investment returns. The picture is clear: the U.S. market, fueled by U.S. exceptionalism, is trading at the highest valuation levels and well above its historical range. Other regions also … Continued

Long-term interest rates are rising across the globe. In principle, higher yields simply reflect the time value of money and stable inflation expectations. But today, they are telling a different story. Bond vigilantes are increasingly questioning the ability of governments in France, Japan, the UK, and the US to manage ballooning budget deficits and refinance … Continued

Time to take stock after the summer break. US equity markets have staged a remarkable comeback following the uncertainty triggered by Trump’s tariff announcement on “Liberation Day.” For market historians, the rally in the S&P 500 ranks among the strongest of the past two decades – surpassed only by the rebounds after the Global Financial … Continued

As Peter Lynch, legendary Fidelity Magellan Fund manager, once said: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.” Historically, for the U.S. stock market, the data is clear: the longer you stay invested, the lower the probability of loss. … Continued