The Kobeissi Letter - Financial Events in 2023 So Far:
1. Mortgage rates pass 2008 highs at 7.2% 2. Credit card debt set to hit $1 trillion for first time ever 3. Regional bank crisis leads to 2nd and 3rd largest bank collapses in history 4. Fed raises interest rates to highest level since 2001 5. Debt ceiling crisis nearly leads to US default 6. US sees most bankruptcies since 2020 lockdown 7. Interest expense on US debt set to cross $1 trillion annually 8. Fitch downgrades US credit rating for first time since 2011 Yet, the S&P 500 is up an incredible 700 points this year. Is this the most resilient stock market in history? Source: The Kobeissi Letter
MSCI World long-term performance by style
Quality outperforms by far with a lower standard deviation (NB: past returns are not a guarantee for future returns). Source: Invest In Assets | Stock Market Investing
July cross-assets performance billboard by DB -> After a mixed performance in June, July was largely positive for assets across the board
Oil stole the show, as supply cuts spurred upward pressure on prices, and the AI excitement saw the S&P 500 and the Nasdaq extend their rally, both securing their fifth consecutive month of positive total returns. Fixed income took a hit in July, as central banks continued their hiking cycle (via HolgerZ)
2023 has been so far the mirror image of 2022 in terms of #assets returns 2022/2023/2022-23 Combined Total Returns...
$NVDA: -50%/+220%/+59% $AAPL: -26%/+52%/+12% $MSFT: -28%/+41%/+1% $SPY: -18%/+21%/-1% $QQQ: -33%/+45%/-3% $META: -64%/+165%/-5% $GOOGL: -39%/+50%/-8% $AMZN: -50%/+59%/-20% $TSLA: -65%/+117%/-24% $NFLX: -51%/+49%/-27% Source: Charlie Bilello
Asset class billboard updated as of 31/7/2023
Source: Charlie Bilello
Asset size
Source: JC Parets
Latest outlook from IMF shows expectation for global growth this year up to +3% year/year
2024 growth also at +3% … expectation is for U.S. to grow 1.8% this year, 0.2%-point increase from April; China expected to grow 5.2%, unchanged from April. Source: Bloomberg, Liz Ann Sonders
J.P. Morgan Kolanovic & Dubravko -> The recent rise in market cap concentration has been the steepest on record based on >60 years of history
Even narrower leadership than seen during the TMT Bubble. Source: Seth Golden
