Category: Daily Instagraph

Since the financial crisis in 2008, US companies have managed to constantly increase their competitiveness against the businesses located in other developed countries. Return on equity for the MSCI US is currently 5.5% higher than the one for MSCI AC World ex US. There are many reasons for this, one being that the US index … Continued

Sector valuations for the S&P 500 speak a clear language. InfoTech is currently at a 40% premium valuation in terms of PER compared to the S&P 500. Compared to the 30 years history this is a rare event: on average the premium was less than 20% and such an extreme valuation as today happened less … Continued

Over the last weeks we have seen a whole series of economic data coming out of the US that has been surprising economists positively. This week we had again strong US housing, consumer and durable goods data. At the same time economic surprises lack in Europe. Result: the current divergence between the surprise indices of … Continued

We can not recall having seen the performance of the US equity market so concentrated on only a few names. The top 15 companies in the S&P 500 are up 34% while the median company in the S&P 500 is only up 1%. In Europe the situation is less extreme but still. Instead of spending … Continued

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