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Printed: 17 June 2024 5:10 AM


5 Jul 2023 - 10k Words | June Edition

By: Equitable Investors

10k Words

Equitable Investors

May 2023

Changes in the cost of capital remain front and centre with Japan's dividend yield surpassing the rest of the world's for the first time in 50 years and asset class yields converging as fund managers express bullishnes on bonds, with 30+ countries facing inverted yield curves and the futures market still pricing a decline in the Fed Funds rate. It is amazing how even having the ticker "AI" has been enough to attract buyers. Amidst such sentiment, Nvidia has joined the trillion dollar market cap club - being in the sector that has diverged from bonds of late. Such mega caps are living in a different world from small businesses facing into tighter lending. We look at the S&P 500's trends relative to interest rates and "QE" and how large cap growth has been above other market segments over the past decade. There's still not much joy in IPO markets - especially for those who didn't sell quickly. Finally, we take a look at the decline of cash in the Australian economy and the resurgence of commercial aircraft orders.

Japanese dividend yield exceeds the rest of the world for first time in 50 years

Source: Minack Advisors, Asian Century Stocks

Compression of yields across assets

Source: Financial Times

Fund Managers' bullish bonds, negative equities, relative to historical levels (June 2023 survey)

Source: Bank of America, [email protected]

33 countries have an inverted yield curves


Market expectations for Fed Funds Rate (as per futures)

Source: @CharlieBilello

Recent surge in price of (Ticker "AI")

Source: TIKR

Stock code "ZOOM" took off when Zoom Video Communications (ZM) surged in 2020

Source: TIKR

Nvidia joins "Trillion Dollar" Market Cap Club

Source: Statista

Divergence between tech valuations & bond yields

Source: Bloomberg, Koyfin

Loan availability compared to three months ago

Source: NFIB Small Business Economic Trends May 2023

Fed tightening, EPS growth & PE multiple expansion/contraction

Source: @EquitOrr

S&P 500 performance and Federal Reserve net Quantitative Easing (QE)

Source: Bloomberg

US equities - growth v value over the past 10 years

Source: Equitable Investors, Koyfin

Recent US IPOs

Source: Koyfin

ASX IPOs in CY2023

Source: 61Financial

Sharp decline of cash's share of Australian payments

Source: RBA

Net orders for commercial aircraft

Source: The Economist

June Edition

Funds operated by this manager:

Equitable Investors Dragonfly Fund


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