Category: Daily Instagraph

Based on data going back 100 years, the S&P 500 has NEVER bottomed in the period before a recession hit. Unfortunately, we can think of many arguments supporting a scenario of a soft or hard recession hitting the US economy in the mid-term: higher interest rates due to tight monetary policy with risk of policy … Continued

According to the BofA Global Fund Manager Survey, fund managers are currently underweighting equities compared to bonds to the highest extent since the financial crisis. This is not surprising as bonds have become more attractive due to the rising yields compared to a stock market that still looks highly valued for the broader market, especially … Continued

As Bloomberg columnist John Authers points out in his latest column, China is currently showing the most positive economic surprises since the financial crisis. China published GDP figures for Q1 with growth of 4.5%, not only above consensus but with retail sales topping 10%. The rebalancing from fixed assets investments to services and the consumer … Continued

In terms of valuation, the UK stock market has seen a downward spiral since Brexit in 2016. This is not a surprise as exiting the EU and the political turmoil that followed came at a substantial economic cost for the United Kingdom. It lost some of its appeal as international capital market as investors shied … Continued

Today’s graph maps the EUR fixed income market by yield and outstanding market value. The largest part of the EUR bond market remains the sovereign bond market. Across all durations, govie’s now generate average yields above 3%. The yield pickup provided by Investment Grade bonds especially in the financial space appears limited for the additional … Continued

The mighty USD, as measured by the Bloomberg Dollar Index, has been weakening over the last months and is currently testing an important long term technical support against foreign currencies. We believe there are different challenges to the USD : 1/ the de-dollarization of the world with the political wish by several countries to diminish … Continued

Yesterday’s March US CPI report came in cooler than expected with headline CPI rising by just 0.1% mainly driven by some moderation in food and energy prices. Core CPI remains however uncomfortably high. Today’s graph from Arbion compares the inflation path we are currently seeing in the US with past inflationary periods. 2 conclusions: 1/ … Continued

US small caps are currently out of favour: the ratio of US small caps to US large caps is nearing March 2020 levels, a trough seen last time just before the Internet bubble burst in 2001. Over the last 10 years US small caps has underperformed large caps by a stunning 4% a year ! … Continued

The US regional bank Western Alliance Bank Corp announced yesterday an 11% drop in it deposit base during the first quarter. Its stock price fell another 12.3% yesterday on this deposit flight representing 5 bn USD, an amount equal to the book value of the bank with a market cap of 3.2 bn USD. Insured … Continued

Container shipping remains a good indicator for global trade and business activity. While it appears global container throughput has only fallen marginally year-on-year, North European ports are currently handling 20% less containers than a year ago. The last time we saw such a drop was during the financial crisis. As we can safely assume that … Continued