Category: Daily Instagraph

When it comes to inflation, the Spanish economy has been leading by 4-6 months the rest of Europe during the recent energy price shock. It is important to stress that massive disinflationary forces are currently at work in Spain especially for producer prices. If Spain was again leading Europe on the way down, inflation in … Continued

Manufacturing PMI’s speak a clear language for the developed economies as they point towards a significant slowdown in the manufacturing sector. While the service sector is holding up well until now, developed economies are due for an economic slowdown. The interesting point is that both equity markets and even more surprisingly bond markets appear to … Continued

German house prices are down 6.8% in Q1 2023. This is a healthy correction in line with what is currently happening in other European markets. The main reason are higher mortgage costs are taking their toll on demand. Households are also holding back due to economic uncertainties and the political mess around the ecologic transition … Continued

In the US and in Europe, disinflationary forces start to kick and there has been some relief on the inflation front since late Spring this year. There is however one noticeable exception amongst the bigger economies: the UK. Here prices continue to get hotter even when excluding fuel costs. The main reason is that Brexit … Continued

The German Producer Price Index fell 1.4% in May, much more than economists had estimated. There are definitely disinflationary forces at work at a time when manufacturing in European economies is slowing. We interpret this an early indication that the interest rate rises over the last months made by the central banks start to bite … Continued

There are still big differences between the US and the Old Continent on how corporates source their financing. This has not materially changed since the financial crisis in 2008. European corporates remain indeed largely dependent on bank financing representing 75% of their loan book. Investment grade bonds are issued by some but high yield bonds … Continued

3 month US Treasuries are now as attractive as US equities and investment grade bonds as all three asset classes currently produce an equivalent yield. Such a situation is unseen, at least since the great financial crisis. In other words, there is no remuneration for the additional risk investors take by investing in bonds ( … Continued

According to Warren Buffett: “Investors should remember that excitement and expenses are their enemies.” For AI, you have the kind of excitement currently that may well end at a heavy cost for some investors. Example NVIDIA: the company is a clear winner of AI but its stock price is now supercharged. The stock is up … Continued

So the Fed paused yesterday following 15 months of interest rate hikes. However, policymakers adjusted the language in their statement, referring to how they would determine “the extent of additional policy firming that may be appropriate,” rather than “the extent to which additional policy firming may be appropriate.” This nuance is important as the Fed … Continued

Long big tech is currently the most crowded trade amongst global institutional investors according to the widely followed BofA Global Fund Manager Survey. It has not escaped to any portfolio manager that most of the performance of the S&P 500 this year was driven by a few big tech names. The irresistible rise of Artificial … Continued