Fund Monitors Pty Ltd

www.fundmonitors.com
© Copyright 2023
Printed: 05 February 2023 8:55 AM

News

13 Feb 2023 - 10k Words

By: Equitable Investors

10k Words 

Equitable Investors

January 2022


If there was a year in investment markets where swearing was justifiable, 2022 would be a great candidate. The FT shows us swearing reached new heights on company conference calls. Maybe swearing in 2023 will find a new peak as the feeling of greater uncertainty remains - just look at the IMF's plot. Gartner's estimate of a 28.5% year-on-year decline in global PC sales may cause a few to swear, at least privately. Net flows into tech, as charted by JP Morgan, were hammered right through to the end of 2022. Of course it was the unprofitable segment of tech that Charles Schwab's @LizAnnSonders shows taking the most heat. We can also see that pain in the price/sales multiple contractions highlighted by The Macro Compass' @MacroAlf. There can be no doubt the cost of capital has jumped - Professor Damodaran's expected equity return estimate has increased >4% while Bloomberg's negative yield bond chart lost its last member. Two different schools of thought fight it out over what the Fed needs to do to curb inflation - CLSA shows that when US inflation has spiked above 5%, the Fed had to lift rates to "within spitting distance" of the inflation peak; but DoubleLine is backing the bond market's lower implied rates over the Fed's expectations. Economist @C_Barraud picked up on the decline in Australian house prices as borrowing costs surge. Credit card rates are surging too, as per FRED data, and re: venture consulting sounded the alarm on personal savings in the US diving. The cost of debt is also a growing problem for governments, @CharlieBilello highlights. Looking forward to reporting season, Bespoke sees market expectations in the US have been pulled back across almost all sectors. FactSet's aggregate of S&P 500 earnings estimates shows a 3.9% decline is now the consensus for the December quarter - but the actual earnings growth rate has exceeded the estimated earnings growth rate at the end of the quarter in 38 of the past 40 quarters. Finally, some good news - chart brought to our attention the progressive healing of the ozone layer.

Bull market in swearing - frequency of swearing on conference calls

 

Source: AlphaSense, Financial Times

 

World Uncertainty Index - Ukraine invasion spike in red

 

Source: IMF

Global PC shipments in December quarter of CY2022

 

Source: Gartner

Thematic net flows split (excluding ETFs)

  

Source: JP Morgan, @wallstjesus

Performance of non-profitable tech stocks (US)

 

Source: Charles Schwab's @LizAnnSonders, Bloomberg

Price-to-sales for VC-backed IPOs (US)

  

Source: Pitchbook, Morningstar, @macroalf

US Equity Risk Premium

 

Source: Aswath Damodaran

The last of the negative yielders

 

Source: Bloomberg

When US inflation has spiked above 5%, Fed Funds Effective Rate has had to follow

 

Source: CLSA via @nomad_cap

Fed Funds Rate - Market Expectations v Fed Projections

Source: DoubleLine

 

Australian home prices slide as borrowing costs surge

Source: CoreLogic, RBA, @C_Barraud

 

US credit card interest rates surge 

Source: FRED, Blockworks

US personal savings rate hit the lowest level on record in late 2022

  

Source: re:venture consulting

Interest expense on US public debt outstanding

 

Source: @CharlieBilello

 

US S&P 1500 EPS revisions by sector - the sptread between positive and negative

 Source: Bespoke Investment Group

S&P 500 quarterly earnings growth - estimates and actuals

 

Source: FactSet

The ozone layer is healing

  

Source: Hegglin et al, Chartr

 

January Edition


Funds operated by this manager:

Equitable Investors Dragonfly Fund


Disclaimer

Nothing in this blog constitutes investment advice - or advice in any other field. Neither the information, commentary or any opinion contained in this blog constitutes a solicitation or offer by Equitable Investors Pty Ltd (Equitable Investors) or its affiliates to buy or sell any securities or other financial instruments. Nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

The content of this blog should not be relied upon in making investment decisions. Any decisions based on information contained on this blog are the sole responsibility of the visitor. In exchange for using this blog, the visitor agree to indemnify Equitable Investors and hold Equitable Investors, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to legal fees) arising from your use of this blog, from your violation of these Terms or from any decisions that the visitor makes based on such information.

This blog is for information purposes only and is not intended to be relied upon as a forecast, research or investment advice. The information on this blog does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Although this material is based upon information that Equitable Investors considers reliable and endeavours to keep current, Equitable Investors does not assure that this material is accurate, current or complete, and it should not be relied upon as such. Any opinions expressed on this blog may change as subsequent conditions vary.

Equitable Investors does not warrant, either expressly or implied, the accuracy or completeness of the information, text, graphics, links or other items contained on this blog and does not warrant that the functions contained in this blog will be uninterrupted or error-free, that defects will be corrected, or that the blog will be free of viruses or other harmful components. Equitable Investors expressly disclaims all liability for errors and omissions in the materials on this blog and for the use or interpretation by others of information contained on the blog

Australian Fund Monitors Pty Ltd
A.C.N. 122 226 724
AFSL 324476
Email: [email protected]