Category: Daily Instagraph

Both French and Spanish inflation figures came in higher than estimated in February and show that the CPI trend is again to the upside in Europe. In France, price increases were driven by an faster growth in food and services. We believe that this will leave the ECB no choice but to continue on their … Continued

6 months T-Bills currently yield approximatively the same than the US aggregate bond market and the US equity market. This raises the question why investors should take the risk of investing in either bonds or equities. For bonds investors are indeed currently not being remunerated on an aggregate basis for duration or credit risk. For … Continued

Global high-grade government and corporate bonds had the best start ever in January with their index up 4%. Investors rushed back into bonds after a dreadful 2022 due to expectations that inflation was peaking and an end of central bank tightening was in sight. In February, bond markets worldwide gave back most of their gains … Continued

The Eurozone economies are expanding again according to the leading indicators. The Purchase Manufacturing Index ( PMI ) published yesterday is in expansion territory ( above 50 ) and rising at the fastest pace since May 2022. This confirms again that Europe is economically more resilient than many sell-side strategists had feared. The energy crisis … Continued

US individual investors have become more bullish on the stock market: the number of bearish respondents to the AAII survey is at a new low since the start of the Ukrainian war. The CNN fear and greed index is also firmly again in greed territory. This positive sentiment can only be explained by fear of … Continued

European stocks trade at 12.7 forward earnings, which is below their long term average and still at a 31% discount to the US market trading at a forward P/E of 18.4, the top of its historical range. The current result season is also showing us that European corporate world is doing better than some top-down … Continued

US money market Funds have been seeing record inflows since the pandemic and reach new all-time highs in AUMs. This is not surprising with an overnight deposit rate above 4.5% and a 3 months T-Bill approaching 4.7%. Let’s not forget that these yields are nominal with an inflation rate running at 6.5% y-o-y and new … Continued

With the re-opening of the Chinese economy after the loosening of the Covid restrictions, significant pent-up demand by Chinese consumers can be expected. This should not come as a surprise as the Chinese consumer has restricted himself to the basics for almost three years, namely food and other staples. According to Pictet AM, household excess … Continued

Earnings growth of US companies is turning negative. This is actually a rare event : the last time it happened was during Covid-19 and it only occurred 5 times over the last 2 decades. According to star strategist Mike Wilson from Morgan Stanley the upcoming path of earnings is clearly negative. What this implies for … Continued

We can argue for a long about the resilience of the US economy in light of a hawkish Fed raising interest rates to fight inflation. Our base case remains however the same: an inverted yield curve will eventually lead to, at least, a mild recession. This in turn will contract demand for products of US … Continued