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1 May 2023 - 10k Words | April 2023

By: Equitable Investors

10k Words

Equitable Investors

April 2023


Funds continue to flow into equities despite recent volatility and recession fears, with Barclays noting fund flows lag performance. Performance is highly correlated with money supply, notes GLJ Research, and central bank liquidity may actually have been increasing lately according to Citi Research. The "Buy the Dip" mantra helps, as Bloomberg charts this strategy's recent success. Despite equity markets holding up, capital raising remains suppressed relative to dealogic's 2020 and 2021 figures. WSJ highlighted aerospace and defence technology as an area where there does appear to be strong capital flows. US banks, however, have seen deposit outflows, as charted here by Reuters. Margins have blown out on ASX-listed debt and hybrids, as per Bell Potter charts, which are largely issued by banks and financials. Bond market volatility is at historically high levels as seen from Bespoke and FT charts. Back in equities, the concentration of major indices stands out and Equitable Investors has pulled together top ten stats. The S&P 500 would have been down in March without "big tech", eToro highlights.

US households supporting flows to equities despite recession risk

Source: Barclays Research

Money Supply (M2) has high correlation with S&P 500

Source: GLJ Research

Global central bank liquidity has been increasing according to Citi Research

Source: Citi Research, Bloomberg

2023 shaping up as the second best year for dip-buying strategy

 

Source: Bloomberg

Global equity capital raisings by quarter ($US)

Source: WSJ, dealogic

Australasia equity capital raisings by quarter ($US)

Source: WSJ, dealogic

US VC deal activity in aerospace and defence technology

 

Source: WSJ, PitchBook

US bank deposits

 

Source: Reuters

Trading Margins on ASX Listed Debt and Hybrid Sectors (27 Mar)

 

Source: Bell Potter Research

US Two-Year Bond Yield - Four Week Average Daily Move

Source: Bespoke Investment Group

ICE BofAML MOVE Index (US bond market implied volatility)

Source: FT, Refinitiv

Top 10 Nasdaq 100 components = 55% weighting

 

Source: Equitable Investors, SlickCharts

Top 10 S&P 500 components = 27% weighting

Source: Equitable Investors, SlickCharts

Top 10 iShares Core S&P/ASX 200 ETF components = 46% weighting

Source: Equitable Investors, Iress

S&P 500 performance without "big tech"

Source: eToro, Bloomberg

April Edition


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