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28 Sep 2022 - 10k Words

By: Equitable Investors

10k Words 

Equitable Investors

September 2022

Earnings season on the ASX has come to a close with a historically low number of downgrades on the FY22 numbers, as tracked by Wilsons, but more downgrades than upgrades to EPS and dividend guidance for FY23, based on Evans & Partners' numbers.

The one year return on Bloomberg's benchmark for the bond market is down 19% over the past 12 months. While the Australian yield curve is sloping upwards, the US yield curve is currently inverted. An inverted yield curve has historically led to some type of "break" in the system, @Marlin_Capital warns. But the inflation data is potentially turning - Yardeni highlights plunging US gasoline prices.

Given the European situation, nuclear power and uranium are seeing a revival of sorts, at least with Japan revisiting its stance. Uranium equities have been advancing and the Washington Post ran a Blooomberg piece highlighting the unsavoury sources of current uranium supply.

Taking a look at equities, Bespoke's optimistic take on the June half-year's poor showing is that such a poor first six months is typically followed by 12 months of 20%+ returns for the S&P 500. We thought it was interesting how closely the Grayscale Ethereum Trust has traded in comparison with the ARK Innovation ETF - a speculative cryptocurrency vehicle alongside a high growth tech investment vehicle. And potentially adding some colour to that is Visual Capitalist's charting of the demise of long-term investing.

Aggregate ASX earnings downgrades announced over course of 12 month reporrting cycle

Source: Wilsons

Net guidance upgrades for FY23f for the S&P/ASX 200

Source: Evans & Partners

Bloomberg Global-Aggregate Total Return Index Value Unhedged USD

Source: RBA

Australian and US yield curves



An inverted yield curve has historically led to some type of "break" in the system

Source: @Marlin_Capital, Federal Reserve of St Louis

US gasoline priced have plummeted as consumption is reduced relative to a year earlier

Source: Yardeni Research

North American uranium ETFs on the rise (URA, URNM, U.U)

Source: TIKR, Equitable Investors

Authoritarian nations dominate the world's uranium production

Source: Washington Post / Bloomberg

S&P 500 has been up at least 22% in the year following prior 20%+ two-quarter drops

Source: Bespoke

Grayscale Ethereum Trust (orange) and ARK Innovation (green) moving together

Source: TIKR, Equitable Investors

The average holding period of shares on the NYSE has fallen to new lows

Source: Visual Capitalist

September Edition

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