Italy 10y risk spread over German 10y bunds back >200bps as budget day arrives
Italy PM Meloni to unveil tax-cutting 2024 budget today amid debt worries. Source: Bloomberg, HolgerZ
There are good reasons why European stocks are so cheap compared with US stocks
Overregulation, lack of innovation, to name a few Source: Michel A.Arouet, Bloomberg
European gas price jumped to 6mth high as security threats to region’s infrastructure added to rising tensions in Middle East
Q3 Revenue +9% Y/Y to €20.0B (in cc). 🍷 Wines & Spirits -14% to €1.5B. 👜 Fashion & Leather goods +9% to €9.8B. 💅 Perfumes & Cosmetics +9% to €2.0B. 💍 Watches & Jewelry +3% to €2.5B. 🛍️ Selective retailers +26% to €4.1B. Source: Quartr, App Economy Insights
Here's a visual comparing the 5 largest companies in the U.S. to the 5 largest in Europe by market cap
It's absolutely remarkable that $AAPL alone is almost twice the size of all five European giants combined. Source: Quartr
Novo Nordisk weight loss drug Ozempic is causing selloff in candy and beer stocks, per Bloomberg.
Walmart said it’s already seeing an impact on shopping demand from people taking Ozempic. That sent shares of food and beverage companies sliding, some to multiyear lows. Source: Bloomberg, TME
The construction sector in Germany is really crashing. The German PMI Construction Index fell to 39.3 in Sep from 41.5 in Aug, and the lowest level since statistics began
Source: HolgerZ, Bloomberg
German Bond Yields Surge to 3%, Unseen Since 2011!
In sync with global bond markets, German bond yields are experiencing a significant surge, marking a noteworthy milestone. The 10-year German yield has ascended to a remarkable 3%, a level not witnessed since 2011. This notable surge is primarily rooted in the rise of real yields, clearly depicted by the yellow line on the charts. Interestingly, inflation expectations, measured by the breakeven rate, have remained steadfast since the beginning of 2023, with the 10-year German breakeven rate holding firm at 2.29%. Despite the enduring challenges in Europe's economic outlook, there have been noticeable improvements, albeit against the backdrop of economic strain. Over the summer, the Citi Economic Surprise Index for Europe has impressively rebounded, transitioning from a daunting -150 to a more manageable -50. This reflects positive developments amid the ongoing challenges. However, the persistent turbulence in the government bond market can be attributed to several factors. These include the synchronized reduction of balance sheets by most developed central banks, which directly impacts real interest rates and term premiums. Additionally, the narrative of "higher for longer" has prompted a recalibration of flows into the front end of the yield curve, driven by concerns about the long end's convexity potentially not performing well in this scenario. The current resilience of the US economy, coupled with uncertainties surrounding the potential for a second phase of rising inflation within a soft landing scenario and a larger fiscal deficit, adds further complexity to this landscape. Source : Bloomberg
A death cross on the Euro-dollar
Watch out the key 1.05 support level. There is not safety net underneath Source: TME Activate to view larger image,
