We have seen one of the fastest drops in equity positioning since early 2022. Time to think about the upside pain trade?
Source: TME, DB
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
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
This is not the chart of an AI or crypo
It is the chart of India BSE small & medium IPO index Source: Amit Jeswani
US equites sector valuations vs. history
>>> Energy as the standout cheap one< trades at a material discount to the S&P 500 due to lower growth characteristics and concerns about the duration of the cycle. Source: Goldman Sachs, TME
Apollo just said that bonds are now more attractive than equities...
The spread between corporate bond yields and the S&P 500 earnings yield just hit its highest since 2008, at 1.5%. This spread was negative for nearly 13 years before turning positive in mid-2022. Even in 2020 this spread did not turn positive amidst the global lockdowns. Source: The Kobeissi Letter, Apollo
