With “risk free” rates above 5%, the typically low-growth, high-dividend payers in the sp500 are massively underperforming in 2023
The 101 non-dividend payers are up 20.4% YTD, while the 100 highest yielders in the index are down an average of 3.5% on a total return basis. Source: Bespoke
According to Morgan Stanley research last year. $AAPL has an estimated 860 million subscriptions sold
If this is correct, Apple could raise the monthly price by $1 per month on these subscriptions and generate an incremental $10 billion per year in revenue. Apple has set themselves up with a simple pricing lever that can generate incremental high-margin returns for years ahead. Source: Morgan Stanley, Joseph Carlson
From T.I.N.A (There is No Alternatives to risk assets) to T.A.R.A (There Are Reasonable Alternatives, i.e bonds)
Three years ago in August 2020, the S&P’s dividend yield (in red below) was 1.8%, almost 50 bps higher than the highest yield on the treasury curve. Every treasury note with a duration shorter than 5 years had a yield below 0.2% and the 1-month was almost ZERO. Fast forward to today and the S&P’s dividend yield of 1.55% is 260 bps lower than the lowest point on the treasury curve right now (the 10-year at 4.15%). And the 1-month T-bill yielding at 5.34% is 380 basis points higher than the S&P’s dividend yield. Source: Bespoke
Many are concerned that higher rates will hurt growth, but it turns out that a lot of S&P 500 companies have locked in debt at much lower rates until 2030
Source: Bloomberg, Goldman Sachs
Global equity positioning by ctas is very, very long
Source: Markets & Mayhem, Goldman Sachs
Another big week of earnings coming up!
• Monday: $MNDY. • Tuesday: $HD, $NU, $SE. • Wednesday: $CSCO, $JD, $STNE, $TCEHY. • Thursday: $BILL, $WMT. Source: Earnings Whisper, App Economy Insight
Out of 20 valuation metrics, the SP500 is currently overvalued on 19 of them relative to historical levels
Source: Barchart
Nvidia ($NVDA) was the big loser, down over 8% on the week (its biggest weekly loss since Sept 2022...)
Will the stock repeat a similar de-bubbling process than the one which took place after the crypto/mining boom? (at the time, Nvidia chips were seeing growing demand from the crypto miners but the buzz faded when crypto crashed) Let's keep in mind that Nvida is now a much BIGGER WEIGHT in the key US equity indices than it used to be at the time... Source: Bloomberg, www.zerohedge.com
