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29 Nov 2023 - 10k Words | November 2023

By: Equitable Investors

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

Image

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


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