The Fed's balance sheet hit its lowest level since June 2021 this week, down over $1 trillion from the peak in April 2022
Annual changes in the Fed's balance sheet since 2002... Source: Charlie Bilello
Wondering why high interest rates hasn't hurt sp500 performance so far?
Just have a look at the chart below courtesy of Linas Beliūnas. The S&P 500 heavy weights are full of cash and have been benefiting from the higher yield paid on short-term deposits. E,g Apple is making $1 billion on their cash holdings doing absolutely nothing...
Nobody can predict at the moment how the Middle East situation will unfold, but if history is a guide market impacts of geopolitical scares are usually short lived
Will it be different this time? Source: Michel A.Arouet
Heavy Supply remains a risk for US Treasuries
How long will the Fed be able to continue with QT? Source: Michel A.Arouet
The 10 Biggest Swiss Watch Brands 🏆by revenues
Source: Morgan Stanley
The bull-market is one-year old and the leadership has been unusual
• Since 1980, every single end to a bear market and start of a new bull has been accompanied by a broad rally in stocks, with the Equal Weight Index and small-caps stocks outperforming the S&P 500. • This time is different: the S&P 500 is heavily influenced by the 10 largest companies, which have enjoyed outsized returns. The so-called "magnificent seven" (Amazon, Apple, Alphabet, Meta, Microsoft, NVIDIA and Tesla) are up 77% over the past 12 months. But the S&P 500 Equal Weight Index, which assigns the same weight to all the stocks that are included, is up a more modest 11% for the same timeframe. Small-cap stocks are up 5%. Source: Edward Jones
Cash + Treasury Bills now account for 15% of BoA's Global Wealth AUM, the highest level since the onset of the pandemic and one of the highest levels since the GFC
This could potentially limit the downside risk if that capital rotates back into stocks. Source: Barchart, BofA
For the first time in the last 5 decades, rising interest rates have failed to cause Stock P/E multiples to contract
Source: Barchart
