Real estate debts in Europe have the most concerns!
One of the main consequences of the sharp rise in interest rates is the level of damage it could have on the real estate sector. The European high yield market is already anticipating complicated months for the real estate sector with a cumulated default probability of 8% over the next two years , the highest of all sectors. Is the worst to come? Source: Bloomberg.
Foreign Investors are back in China bonds!
For the first time since January 2022, foreign investor flows into Chinese bonds returned to positive territory in December 2022, underscoring the region's supportive momentum. Despite this positive month, total foreign ownership declined in 2022 to a record $93 billion. Source: JPMorgan
More companies are mentioning ''job cuts'' in the US
More companies are mentioning ''job cuts'' in the US. Still a limited amount, but now approaching 2019 levels. These figures would be consistent with 100k Non-Farm Payrolls ahead. The labor market is weakening, and if it doesn't the Fed will push until it does. Source: MacroAlf
A good news for S&P 500 margins? CPI is now above PPI
Finally, PPI is below CPI - this is welcome news for the S&P 500 margin outlook. Source: Bloomberg, Gina Martins Adams
US, China and EU GDP over time
Source: Bloomberg
OPEC+ continues to miss oil production quotas, despite a recent cut.
Total production for OPEC+ countries (excluding the OPEC exempt) was 38.3, falling short of the 40.1 quota by 1.8 MM bbl/d. Misses vs. quota are getting smaller vs. what they were prior to the cut. Source: Bison interests
Chart from GS showing the equity market cap as a share of GDP for different nations
At the end of 2022, the US' equity market cap was 164% as a share of their GDP. Source: Goldman Sachs
Energy prices collapsed: European Gas Future now 84% below ATH, German 1y ahead Power Price 85% below ATH
Source: Bloomberg, HolgerZ
