Category: Daily Instagraph

Only 11% of the US household debt is currently on variable interest rates. Therefore the US consumer is currently not very sensitive to higher interest rates when paying down his mortgage debt, auto and student loans. The ones really impacted are the ones contracting new loans or renewing existing ones. The pain of the interest … Continued

European equity markets now trade at a record 34% discount compared to the US in terms of 12 months forward Price-to-earnings ratio. The average discount over the last 25 years was 13%. Pre-Covid it was around 20%. This year the discount has grown as the US multiple has increased by 18% while the European multiple … Continued

The US is building up new factories at an unseen speed: the construction spending for manufacturing is surging and has doubled since 2021. This is mainly due to supportive policies implemented by the government in the form of direct funding and tax incentives. The boom is driven by construction of computer, electronic and electrical manufacturing. … Continued

With the public school holidays having started in Luxembourg, time for a less (economically) serious Daily Instagraph. In France, overall wine sales have seen a downward trend in volumes over the last 25 years. On the one hand, volumes of red wine sold have halved. On the other hand and surprisingly, Rosé is no longer … Continued

We take note that investors globally have “parked” more money than ever in bonds and cash over the last years. At the same time, money has been taken out of global equities, especially since the recession/inflation narrative took hold over the last year. With such a positioning, the slightest change in the economic environment towards … Continued

Inflation in the US is cooling down. CPI for June came in at 3%, lower-than-expected, a two-year low and one-third of the level it reached a year ago. Core inflation, excluding volatile food & energyprices, is also coming down. Without wanting to cry victory too soon as there is a positive ‘base effect’ in these … Continued

7.32% is the fixed interest rate paid on average in the US for a new 30 year mortgage loan. This is not only a decade high but prohibitive for homebuyers who will think at least twice before locking in a mortgage for 3 decades. While most mortgages are of shorter duration, we can not imagine … Continued

The 10 biggest stocks by market capitalization currently represent 31.7% of the S&P 500, the biggest concentration of the US stock market in 30 years. Is this really justified by fundamentals? We believe not as earnings only represent 21.5% of the profits generated by the companies in the S&P 500. This is a rather average … Continued

The oil price is hovering around 73 USD, a level 45% below the post pandemic highs reached in Summer last year. Remember that US strategic petroleum reserves are at a 40 year low and recent stronger economic data coming out of the US diminishing concerns of a severe US recession. From that perspective it is … Continued

Yesterday the 2-year US Treasury yield briefly shot above 5%, creating turbulence in the bond and the equity markets. 2 reasons: 1/ stronger-than- expected job data in the US and 2/ the Dallas Fed governor voicing concerns that inflation was still too hot and further tightening was needed. We are less concerned as bond yield … Continued