The S&P’s price has diverged from the trend for EPS estimates recently
The rise in bond yields probably explains this dichotomy
Last time global stocks had a longest streak of losses than the one we're in currently was 12 years ago
Source: Bloomberg, David Ingles
Is the golden era of 60/40s coming to an end?
And if equities / bonds correlation stay positive, which asset classes should be added to portfolios? hard assets and commodities? alternatives (private debt, private equities, etc.)? cash on an opportunistic basis? Source chart: Tavi Costa, Bloomberg
Congress Averts US Government Shutdown Hours Before Deadline – Bloomberg
The US narrowly averted a disruptive and costly shutdown of federal agencies as Congress passed compromise legislation to keep the government running until Nov. 17. The legislation, passed in both chambers Saturday just hours before a midnight deadline, buys Democrats and Republicans time to negotiate longer-term federal funding. It doesn’t include new funding for Ukraine. President Joe Biden signed the bill late Saturday night, capping an extraordinary day in Washington that began with the country careening to what appeared to be an inevitable and prolonged federal funding lapse.
The longest time period chart on US interest rates you will ever find...
Source: BofA
Last month returns for the sp500 constituents in one chart
Source: Trading View
While mega-caps tech stocks are recording huge returns on their cash pile thanks to the rise of interest rates, this is not the case for the rest of the market
Small cap companies are paying the most interest expense ever recorded and unfortunately their interest income is not keeping pace. This will become an even larger problem when small companies are forced to refinance at significantly higher rates. Source: FT, barchart
Yes you can lose a lot of money with bonds...
The Pimco 25+ Year Zero Coupon US Treasury ETF is off more than 60% from its high
