Technology stocks now reflect a record ~25% of all equity fund assets
Just 8 years ago, technology stocks only reflected just ~9% of all equity fund assets. Meanwhile, 5 stocks currently account for ~70% of the Nasdaq's gain this year. Technology stocks have become the backbone of the stock market. Source: The Kobeissi Letter
European stocks are becoming very disconnected from macroeconomic data
Source: Cheddar Flow, Bloomberg
Germany Factory Orders Slumped 11.7% at Start of Third Quarter
*GERMANY JULY FACTORY ORDERS FALL 11.7% M/M; EST. -4.3% *GERMANY JULY FACTORY ORDERS FALL 10.5% Y/Y; EST. -4.5% German factory orders plummeted in July, a sign that the woes of Europe’s biggest economy continued into the third quarter. Demand decreased by 11.7% from June, far worse than the 4.3% drop expected by economists in a Bloomberg survey. That decline was due to major orders, without which the gauge would have increased by 0.3%. The drop in what is a volatile series did follow three months of gains. Source: Blooomberg
Can oil move back to triple-digits?
According to the GS commodities team, production cuts by Saudi Arabia and its OPEC+ partners - at the time demand continues to rise - will result into an average 3 MILLION BARREL DAILY SHORTFALL into year end (vs. 2 million barrel previously). This is coming at the time when: 1) Not much help is expected from US Strategic Petroleum Reserve (Biden adminstration has already drained half of the SPR, as such there are virtually no levers left to pull at this point); 2) Net spectulative positions on WTI Oil futures contract is at the LOWEST since years Source: Goldman Sachs, www.zerohedge.com
Shares of Chinese property developers Evergrande soared as much as 82% on Wednesday
Other stocks like Country Garden Holdings and Logan Group also surged, gaining as much as 26% and 28% respectively. The gains come after Country Garden reportedly managed to pay $22.5 million in bond coupon payments on Tuesday, narrowing avoiding default. Let's keep in mind though that the sector is far out of the wood. According to Bloomberg, 34 out of the top 50 private real estate developers in China are suffering delinquencies. The remaining 16 developers face a combined $1.5 billion of bond payments this month. In January 2024, these remaining 16 Chinese developers will face a massive $3.0 billion in bond payments. Source: The Kobeisi Letter, CNBC
Can it last?
$TSLA 👇Albert Bridge Capital thru Michel A. Arouet
The most valuable listed company in Europe now comes from Denmark
Novo Nordisk has overtaken luxury goods group LVMH on the stock market. It is now worth >€400bn, LVMH 'only' €382bn. The Danish drugmaker on Monday introduced Wegovy in Britain after launching it in the US in June 2021. Soaring demand in the world’s largest drug market subsequently delayed marketing in Europe. The drug is already available in Norway, Denmark and Germany. The company said on Monday that the drug would be introduced to the UK “through a controlled and limited launch”. Novo Nordisk is the largest producer, by sales, in a market for diabetes and new weight-loss drugs that analysts forecast would reach $130bn to $140bn in annual sales worldwide. The company’s biggest competitor in the market, Indianapolis-based Eli Lilly, has applied for regulatory approval to use its diabetes drug Mounjaro to treat obesity. Source: FT
Do you remember these Covid darlings?
Below 4 examples of "Pandemic boom and bust" companies (they are not necessarily bad companies but they exemplify how extreme valuations get corrected over time and how painful it can be for shareholders who bought at the top) Zoom $ZM -> Market capitalization: $21 billion today vs $168 billion at the peak. Peloton $PTON -> Market capitalization: $2 billion today vs $58 billion at the peak. Moderna $MRNA -> Market capitalization: $42 billion today vs $172 billion at the peak. Rivian $RIVN -> Market capitalization: $22 billion today vs $123 billion at the peak. Source: Simpel Investing
