Social and News

S for Software (…not just Semis?)

Despite being fully aware of the fact that this is one of the most controversial sectors in recent years, we cannot fail to highlight the recent dichotomy between Software and the sector we had highlighted in our previous posts as the main beneficiary of the first part of FOMO purchases linked to the AI ​​world, that is the Semis…

Hawk or Dove?

Yesterday, Ms Lagarde announced a 25bp cut in the deposit rate to 3.75%, the first cut delivered since 2019. The rate cut was supported by all but one of the ECB’s Governing Council. The statement reaffirms that the ECB will let the PEPP portfolio run off by €7.5B per month as previously indicated. All decisions were in line with consensus…

“EM Credit in a good shape”

The last couple of weeks have been relatively calm on the EM space in general. The main focus of the market has been on macro data coming from the US (mainly) and Europe, which came marginally below or in line with expectations and gave more confidence to market participants about the next moves of the Central Banks…

“Credit in a sweet spot”

Developed credit markets are in a sweet spot. After 3 consecutive US CPI readings which surprised on the upside, this week we had a US CPI in line or slightly below market expectations. We also had US retail sales which point to a moderation in consumption. Taken together, these data reinforce the message that Mike Powell….

And wHat Yf….!!!

…even without considering recessionary chances, we cannot fail to highlight some significant aspects regarding the current level of HY corporate bonds spreads compared to their history. The above chart shows the level of US spreads for corporate issuers rated Ba/B1 with a 1 to 5 years maturity, 2Y US yields, the inflation trend (US CPI YoY) and an indicator showing US recessions occurrence and amplitude….

NO CHINA FOMO (Fear Of Missing Out), FOR NOW

Like most of investment professionals, this morning I spent most of my time reading comments from strategists, analysts, and journalists on the recent Fed meeting. Every word from Powell was screened with the highest attention. Rightly so since major central banks greatly influence expectations that influence the economy that influence market prices in a never-ending circular trend….

“Soft landing or no landing?”

With recent macro data in US, which shows a continuous strong job market (at least at the surface), strong economy and resilient inflation (the last 3 CPI print have all surprised to the upside), the market narrative is shifting from a disinflationary boom and soft landing to an inflationary boom and no landing. This change in narrative has consequences for financial markets…

“Switzerland First”

On the 21st of March, the Swiss National Bank cut rates, becoming the first central bank to do so in the G10 FX spectrum in 2024.

Despite the consensus of economists expecting them to remain on hold, the SNB lowered the policy rate by 25bps from 1.75% to 1.5%. The evidence that such move was a…

Interesting chart that shows us that remarkable overperformance of the S&P 500 Index vs the S&P Global 1200 consumer staples Idx.
The situation in Europe is not that different by looking for example at the ratio between European Cyclicals 12m fwd P/E vs Defensives being at the moment more than 1 stdev above the average of the last 25 years…..

The end of the “Ex-Japan” era

In the last few months investors have been laser focused on Tech. The rise of Artificial Intelligence, the unstoppable move in the Magnificent 7 stocks and the return of Cryptos got everyone’s attention. However, behind the scenes, there is an underlying trend in the market that I believe does not get enough credit from the investor community, i.e. Japanese stocks are hot again…