Recession hasn't been discounted by the stock market
Historically, the ERP (Equity Risk Premium) rises materially when a recession arises. So don't assume it is priced. Source: Morgan Stanley
Biggest Junk-Bond ETF Draws Most Cash Since 2020 as Debt Rallies
HYG ETF attracted $1.7 billion of inflows amid cross-asset rally Source: Bloomberg
Japan vs. US from the lens of Earnings Yield minus 2-year Bond Yield
Using Earnings Yield minus 2-year Bond Yield, Japan equities are massively undervalued vs. the US. Yet Japan is under-owned by international investors and under-represented in the World equity index. Source chart: Jeff Weniger
The world's biggest bull market?
According to Goldman's prime book, the crowd has been very busy loading up on Chinese equities and selling US stocks (mainly driven by short sales). Meanwhile, the CSI 300 extended the move higher this morning, closing at the highest levels since mid September. On a side not, the Kraneshares China ETF (KWEB) is up approx 100% from October lows... Source: GS, Bloomberg, The Market Ear
Country distribution of top 500 companies by market cap. All EU countries consolidated together.
Source: chartbear
Hedge Funds ramp up dollar shorts on bets for slower Fed hikes
Source: Bloomberg
French trade deficit expanded in November
As November trade data come in - after European energy prices had come back down - we're getting a picture of the "new normal" across Europe. Here is the French trade deficit (-) every November. Huge trade deficit in 2022, exacerbated by the maintenance of nuclear power plants... Source: Robin Brooks
SWISS NATIONAL BANK POSTS $143 BILLION LOSS IN 2022, THE LARGEST IN ITS 115-YEAR HISTORY
The Swiss National Bank posted an annual loss of 132 billion Swiss francs ($143 billion) in 2022, it said on Monday, the biggest in its 115-year history as falling stock and fixed-income markets hit the value of its share and bond portfolio - source: Bloomberg
