Category: Daily Instagraph

Investors globally continue to pile into money-market funds. Assets under management in these Funds have reached 7.9 tr USD, 10 times the amounts seen in 2007. This is not a surprise as US T-bills yielding 5% or more are considered an attractive investment compared to bank deposits. At these yields, short duration bond funds have … Continued

Financial markets have an busy week ahead with central banks in the US, Europe, China, Japan setting monetary rates. Bond markets are at the current stage pricing in a recession for the biggest developed economies. Yield curves, here measured by the difference between long term and short term bond yields, are indeed solidly negative. If … Continued

The allegory Mr. Market was originally introduced by Benjamin Graham in his 1949 book, the Intelligent Investor, to describe what he believed were the irrational or contradictory traits of the stock market. Mr. Market is what today would be called manic-depressive, with his estimate of the business’s value going from very pessimistic to wildly optimistic. … Continued

Shadow banking is the banking provided by non-banks, like insurers or investments funds, instead of traditional banks. It now represents almost half of the world’s financial assets, double the amount it represented during the financial crisis in 2008. While it is good news to have more sources for banking making hereby the world less dependent … Continued

Market commentators have been briefly declaring the entering of a new bull market yesterday with the S&P 500 now up 20% from its lows in October 2022. To us this is a good time for an update on where the returns were made so far in 2023 in global financial markets (in USD) and provide … Continued

The French consumer has a simple answer to the roaring inflation of food prices: consume less. French households have indeed been cutting back significantly on their consumption of food products over the last months. This forced diet comes at a significant social cost and may lead to accrued political tension on the current government in … Continued

Value remains unloved: all the outflows out of so-called smart-beta ETFs in the US in May were explained again by the Value ETFs. The argumentation brought forward is that the value style will underperform despite the higher interest rates as the US economy is slowing. Also the exposure of these indices to financials and energy … Continued

You thought European equities overall were cheap. Well, UK equities are even cheaper as they trade at their biggest discount towards European equities in two decades in terms of PER ratio. Compared to the US, the UK discount is currently more than 40% with almost all sectors ( except tech hardware and telco ) trading … Continued

The Norwegian government reached a deal yesterday with minority parties to secure a parliamentary majority for lowering to 25% (from the 35% initially planned ) a proposed tax on salmon farmers. This removes an uncertainty that has been hanging over salmon producers over the last months. Their stocks surged with our holding Leroy Seafood increasing … Continued

Worried by the discussion about the debt ceiling … own gold. The argument brought forward by several strategist on Wall Street goes as follows: the political drama about the debt ceiling will ultimately result again into more debt as this debt is required to finance an US budget that was voted. Higher debt levels inevitably … Continued