Are Insurance stocks set to collapse?
LA wildfires have officially spread over 40,000 acres with INSURANCE LOSSES crossing $20 billion. Since the market closed on Friday, ESTIMATED DAMAGES have TRIPLED to $150 billion. Insurance, power company, and other corporate bankruptcies could emerge from this. As seen with the PG&E bankruptcy in 2019 after the Camp Fire disaster, these events can create economic ripple effects. E.g many bonds will be downgraded to "Junk" rating in the near future. Could LA wildfires cause an economic ripple effect? Source: The Kobeissi Letter
Insured losses from the California wildfires are estimated to be the highest ever
Source: Markets & Mayhem
A turn in the trend? US 10-year Treasury yield has risen ~440 basis points over the last 5 years to 4.76%.
If this trend continues that will materially shift the investing landscape with many investors being caught off guard. Source. Bloomberg, Global Markets Investor
🚨 Great chart and post by James Bianco about US 10-year TIPS breakeven during inflationary time.
👉 The chart below shows the 10-year TIPS breakeven. The LEFT part of the line in RED shows the first 115 days after the Fed started HIKING in 2022. Expectations went straight DOWN. See the RIGHT part of the line in RED, the first 115 days after the Fed started CUTTING in September. Expectations are going straight UP and are at a 15-month high. 👉 Restated, the Fed hikes and inflation expectations GO DOWN. The Fed cuts and inflation expectations GO UP. This is classic "inflationary environment" behavior. 👉Markets were disappointed that the Fed did not cut enough is a previous cycle (pre-2020) reaction. This cycle (post-2020) is about dealing with inflation, and cutting is NOT dealing with inflation. Source: Bianco Research
The $TLT chart shows a significant 52% decline from its peak, highlighting the harsh effects of increasing rates.
Investing in long-duration US Treasuries is advisable only under specific circumstances: - When a recession is on the horizon. - When inflation is quickly slowing down. Currently, neither of these scenarios is unfolding. Source: Kurt S. Altrichter, CRPS® on X
TRUMP'S NEW CABINET: A DIVERSE MIX OF POLITICS AND BUSINESS.
Nice infographic by The Epoch Times. thru Mario Nawfal on X Trump's second administration introduces a cabinet of varied backgrounds, including former Democrats and business leaders. Robert F. Kennedy Jr., a former Democrat, joins after endorsing Trump and navigating political backlash from his family. Tulsi Gabbard, once a progressive Democrat, now champions conservative causes alongside the administration. This team blends political outsiders with seasoned operatives, shaping a cabinet that reflects Trump's unconventional approach. Source: The Epoch Times https://lnkd.in/exsmcfen
GS: The US has a valuation at its 20-year peak and this remains true even if we exclude the largest technology companies
Source: Mike Zaccardi, CFA, CMT, MBA
2024 is shaping up to be a big year for privately-held companies, with over 1,200 unicorns globally, up from just 590 in 2021!
(A "unicorn" refers to privately held companies valued at over one billion dollars). Leading the charge is ByteDance (TikTok's parent) at a whopping $220B 💰, followed by SpaceX 🚀 at $180B and OpenAI 🤖 at $100B. Noticeably, the US and China lead the world in both the number of unicorns and their combined market value. Source: Genuine impact
