News and Events

The Shiller P/E ratio on the US market has now moved above 42x, one of the highest valuation readings in more than 150 years of history. The Shiller P/E, also called the CAPE ratio, compares today’s market valuation with the average inflation-adjusted earnings of the past 10 years in order to smooth economic cycles. Only … Continued

John Authers rightly titled today’s Bloomberg Opinion column “Too Hot to handle”. Yesterday’s US CPI figures were not dramatic, but they were uncomfortable. Headline inflation rose to 3.8%, its highest level in three years. Even excluding energy, inflation is still running at 2.8%. This is why the US 30-year yield is back above 5%, approaching … Continued

The chart says a lot about the world we are living in. Over the last decades, for example in the US, wages as a share of GDP have structurally declined, while the stock market’s share of GDP has moved relentlessly higher. In other words, capital has increasingly outperformed labor. This is the essence of the … Continued

One of the most striking market shifts of the past weeks is happening in interest-rate expectations. Back in February, markets were still pricing close to three Fed rate cuts by mid-2027. Today, those cuts have almost entirely disappeared. The reason is geopolitical. Higher oil prices linked to the Iran conflict are feeding directly into inflation … Continued

“It’s the economy, stupid.” More than 30 years after Bill Clinton’s famous campaign slogan, the phrase still defines American politics. Wars, geopolitics and political noise matter, but US voters ultimately judge presidents on one thing: their own financial situation. This is exactly what current polling shows again. According to recent Economist / YouGov data, the … Continued

The valuation gap between US and European equities has widened again to levels rarely seen over the last 15 years. The S&P 500 now trades at around 21x forward earnings, versus roughly 14x for the Stoxx Europe 600. As Charles-Henri Monchau rightly points out, Europe may look optically cheap, but markets are increasingly questioning whether … Continued

Expected EPS growth for the S&P 500 over the next 12 months now stands at 18.6%, driven overwhelmingly by three sectors: technology, materials and energy. In tech, the engine remains the massive AI-related CAPEX cycle, with hyperscalers investing aggressively into infrastructure and computing power. In energy and materials, geopolitics, supply constraints and higher commodity prices … Continued

Financial markets react to the fact that the Iran conflict is unresolved as hostilities continue. Brent futures for year-end are moving back toward $95 this morning, and the whole curve has shifted higher. What stands out is the lack of reaction in equities. Despite higher oil and rising inflation expectations, US stocks remain near highs. … Continued

Berkshire Hathaway is now sitting on close to $400bn in cash. Put differently, this is enough to buy almost any company in the S&P 500 — 478 of the 500 companies are smaller than Berkshire’s cash pile. In Europe, this war chest would also allow Berkshire to take out names like LVMH, Volkswagen and Sandvik … Continued

The gap between profit margins and free cash flow is increasingly linked to AI capex. Large technology companies are investing heavily in infrastructure—data centers, chips, and energy—to support AI. This is starting to show in the numbers: earnings remain strong, but free cash flow is under pressure as cash is reinvested. In that sense, parts … Continued