Category: Daily Instagraph

Brent oil has moved back above USD 85 per barrel after the United States reimposed its blockade on Iranian shipping through the Strait of Hormuz. Only days ago, oil had fallen back towards USD 70 as traffic through the strait resumed and fears of a prolonged supply disruption faded. The renewed escalation is a reminder … Continued

German interest rates continue to move higher, with the 30-year government bond yield now around 3.6%, close to its highest level in more than a decade. The contrast with the previous cycle is striking. In 2020, long-term German yields briefly traded below zero. Today, governments, companies and households must once again pay a meaningful price … Continued

Technology now represents more than one third of the S&P 500, while the ten largest companies account for roughly 40% of the index. Nvidia, Apple and Microsoft alone represent close to one fifth. By contrast, the 250 smallest constituents combined weigh less than 10%. The S&P 500 may contain 500 companies, but its performance is … Continued

The Iran conflict is again reminding markets that a ceasefire is not the same as a solution. Renewed hostilities have pushed Brent back to around USD 78, up 11.6% over the week. The key market channel remains oil. Tanker traffic through the Strait of Hormuz has improved, which is positive, but it is still far … Continued

The S&P 500 is now up 89.32% since 31 December 2022. According to Goldman Sachs, this puts the US equity market on track for one of the strongest rolling four-year return periods of the last 100 years. Mega-cap technology has probably been the main driver of this exceptional performance. This also means that the market … Continued

Financial markets have penalized France since the snap elections two years ago created parliamentary standstill. French equities have underperformed, while the spread of French OATs versus German Bunds remains at elevated levels. The market is not only reacting to political noise. The deeper issue is fiscal credibility. France is expected to run a public deficit … Continued

The AI theme is not only an American story. What is striking is the valuation gap. Alibaba trades around 16x forward earnings, versus roughly 27x for Amazon. Baidu and Tencent trade in the low teens, despite owning large-scale search, cloud, social, gaming, e-commerce and AI assets in the world’s second-largest economy. This discount is not … Continued

Semiconductors used to be a classic cyclical business: boom, overcapacity, bust, then recovery. For investors, that made the sector difficult to own over the long run. AI has clearly changed the current picture. Earnings are booming and, because profits have risen so sharply, valuations do not look obviously stretched on current numbers. The real question … Continued

The US yield curve is flattening, but this should not be read as a signal that inflation expectations are coming down. This is more a bear flattening: the long end remains elevated, with the 10-year Treasury around 4.48%, while the short end has moved higher, with the 2-year now catching up around 4.17%. In other … Continued

The chart of the day shows the strong normalization of tanker traffic through the Strait of Hormuz. After the recent geopolitical shock, the number of vessels crossing the area has sharply recovered across all major categories, including crude oil tankers, product tankers, LNG and LPG carriers. For oil, the message is quite simple. The physical … Continued