Category: Daily Instagraph

The Euro has gained some 13% versus the USD since its September low. According to Goldman Sachs, a 10% rise in the euro shaves 2% to 3% off earnings-per-share growth for European companies. The more global sectors like telco, healthcare and media are particularly exposed as they generate roughly 40% of their sales in North … Continued

As we are at the end of the Q1 result season, it becomes visible what companies in the S&P 500 are currently growing their earnings. The clear sector winners are probably the least appreciated: companies in the energy sector. Energy companies have indeed been growing their earnings by 155% over the last 12 months while … Continued

According to the April Fund Manager Survey from BofA, the “long big tech” trade is by far the most crowded trade amongst institutional fund managers. This happens in a context where the stock market is currently driven by only a few winners ( FAANGS) and where higher interest rates should challenge the high valuations of … Continued

It is not surprising that there is a strong correlation between the availability of credit to the corporate world and the ability of companies to grow their earnings. In the US, the regional banking crisis and the higher rates have let lending officers to tighten their standards before accepting to give out new loans. This … Continued

The market capitalization of Apple has reached a remarkable 2.7 trillion USD. This dwarfs every single continental European stock market as it is for example 10% more than the value of the whole CAC 40 and 80% more than the one of the German Dax. It is now higher than the combined value of the … Continued

Today’s graph is a stark reminder that hyped IPO’s of tech unicorns do most often result into bad stock market investments. At ECP, we believe that investment banks are indeed doing an excellent and well-paid job in pricing and placing the IPO at least at fair value. It appears therefore difficult for us as investors … Continued

Commodities have now reached a 50 year low against overall equity markets. We can think of many arguments on why this will change as demand for commodities should remain sustained once economic uncertainties become less and will for sure be fuelled by the transition to cleaner energy. Also some equity valuations remain high in a … Continued

A lot was written in the past about the concentration of the US markets on a limited number of FAANG stocks. In Europe, the situation is somewhat comparable except that it is not on tech but on luxury goods producers. The market cap of LVMH alone is now higher than the ones of Mexico and … Continued

The US corporate bond spreads, i.e. the difference between the aggregate yield of US corporate bonds and the Fed Funds rate, is currently negative. This may not be surprising as the Fed Funds Rate was increased to the 5-5.25% range yesterday. It however implies that, on aggregate level, the US corporate bond investor is not … Continued

As expected, the Fed rose its funds rate by another 25 basis points to 5-5.25% yesterday. Noticeably it withdrew in its statement from its previous predictions that further rate hikes would follow. It now increasingly looks like the smaller US banks are the first collateral damage of the higher interest rates. Pacific Western announced yesterday … Continued