Category: Daily Instagraph

For several years, US equities have benefited from a simple but powerful technical support: companies have bought back more shares than they issued. This kept net equity supply negative and supported prices, but this support may now start to weaken. As the chart shows, periods of positive net equity supply have often coincided with more … Continued

The current AI capex cycle is becoming one of the largest investment cycles in modern market history. At the peak of previous technological waves — railways, cars, telephony, electrification or IT — capital expenditure looked significant at the time. In historical context, however, today’s AI-related investment boom stands out. We believe in the AI revolution. … Continued

The free cash flow yield of the U.S. equity market is now close to its lowest level in 20 years. In simple terms, investors receive only around USD 3 of free cash flow for every USD 100 invested in the S&P 500. With 10-year U.S. Treasury yields around 4.5%, this is an uncomfortable valuation setup … Continued

According to BofA Global Research, semiconductors are now trading 62% above their 200-day moving average. Historically, major market bubbles peaked on average around 35% above their 200-day moving average. This does not mean that AI is a bubble in the simple sense of the word. The underlying technological transformation is real, the investment cycle is … Continued

The chart is quite symbolic: Nvidia’s 5-year CDS now trades at a level comparable to, and even slightly below, that of the United States. A CDS measures the cost of insuring against a credit default. Of course, one should not compare too directly a company, even an exceptional one, with a sovereign state that issues … Continued

Nothing to do with PSG’s victory, nor Roland Garros. But France is still champion. According to Tax Policy Associates, France has 348 different taxes, compared with 90 in the UK and only 60 in Germany. And this is not because Germany is a low-tax country. Germany raises more than 42% of GDP in taxes, close … Continued

Robert Shiller coined the famous expression “irrational exuberance” to describe periods where financial markets become increasingly disconnected from underlying fundamentals. The explosion of leveraged single-stock ETFs visible in today’s Goldman Sachs chart is another reminder that parts of the market are again entering a phase where speculation, momentum and short-term positioning dominate rational valuation analysis. … Continued

Markets continue to recover at a speed that would have seemed almost impossible during previous crises. According to JPMorgan, the recent correction linked to the Iran conflict recovered in only 11 trading sessions, making it the fastest recovery after a near 10% decline in modern market history. This says a lot about today’s market structure. … Continued

US markets continue to reach new all-time highs, which naturally creates the impression that “everything is already too expensive.” Yet history suggests a more nuanced reality. As highlighted by this study from J.P. Morgan Asset Management, investing when markets are making new highs has historically not led to weaker long-term returns. On the contrary, over … Continued

Semiconductors now represent almost 18% of the total market capitalization of the S&P 500, up from only 5% four years ago. This extraordinary rise reflects the massive global AI infrastructure race currently dominating financial markets. Hyperscalers are expected to spend close to $1 trillion next year on AI-related CAPEX, mainly in semiconductors, data centers and … Continued