Another indicator shows that inflation is expected to be higher in EUR than in US in the medium term!
The 5y 5y forward inflation swap, an indicator of what the market expects inflation to be over the next decade, is rising faster in Europe than in the United States. In fact, markets seem to expect more inflationary pressure in Europe than in the U.S. over the medium term. This is quite significant because the last time this gap between inflation expectations in Europe and the US was in positive territory was in 2009! So more pressure on the ECB to continue tightening monetary policy! Source: Bloomberg
Why you need to invest, in one chart...
Source: Charlie Bilello
Coal stocks pressing to new multi-year highs
Not really the market action which was expected... In the face of limited energy supply, coal stocks are booming to a surge in coal demand. Source: Steven Strazza, All Start Charts
Climbing the wall of worry: US equities sentiment remains bearish
According to Goldman's average percentile of 16 sentiment & positioning indicators, sentiment today is more bearish than it was 1 month ago and 3 months ago. Peculiar. Climb the wall of worry.
Stocks and Treasuries are very correlated again
Source: Goldman Sachs, The Market Ear
AI is a hot topic in earnings calls
Source: FT
Netflix and YouTube combined are responsible for 31.5% of global internet traffic
Source: Statista
Highest default rate in the US High Yield market since september 2021!
There is some stress building in the U.S. high yield bond market, with the highest default rate since September 2021 occurring in January! While the default rate remains low (2.2% in January), U.S. high yield corporates are being downgraded at their fastest pace since 2020. A sign of future economic deterioration? Source: Bloomberg, Moody's.
