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10k Words Equitable Investors November 2023 "Although we forecast that major DM central banks (aside from Japan) are finished hiking, our baseline forecast implies little incentive for them to cut interest rates in the near term," Goldman Sachs foreshadows, with Raymond James charting the cooling of core US inflation to levels still higher than seen for many years. Our favourite chart this month has Apollo showing that the market is almost always wrong about what the Fed will do next. Apollo backs up with a graphic on "weak demand". SMBC NIkko gives us a view on the relationship between inflation and valuation. Tech stocks are at record highs relative to the broader market as Bank of America charts, while Goldman shows the impact on market valuations. Equitable Investors looks at movement in the EV/EBITDA multiple on tech stocks relative to bond yields. We get another take on the surge in index concentration from Bespoke - and small v large via Bank of America. Deutsche Bank reckons AI didn't drive markets. Finally we get stuck into VC, where Crunchbase data shows significantly less unicorns being born and funding remaining subdued, with the Refinitiv Venture Capital Index remaining well of its highs despite recent gains. Goldman Sachs' policy rate forecasts for developed markets
Source: Goldman Sachs Core US CPI
Source: Raymond James The market is almost always wrong about what the Fed will do
Source: Apollo Mentions of "weak demand" during S&P 500 earnings calls
Source: Apollo Earnings multiples mapped against inflation
Source: SMBC NIkko via Bloomberg Tech sector at all-time high vs S&P 500
Source: Bank of America Price-to-Earnings multiples by market - tech sector elevates US multiples
Source: Goldman Sachs US 10 year bond yield (top) mapped against US tech sector (QQQ ETF - bottom)
Source: Koyfin, Equitable Investors S&P 500 stocks from smallest to largest - 10 years ago v today
Source: Bespoke US small caps histoically cheap vs large caps (Forward PE of Russell 2000 v Russell 1000) Source: Bank of America Difference between abnormal returns for semiconductor and software firms, 20 day moving average
Source: Deutsche Bank Emerging unicorns by the year founded Source: Crunchbase Global venture funding (US dollar volume)
Source: Crunchbase Refinitiv Venture Capital Index Source: Financial Times November 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 |
