Skip to content
Miles driven used to match economic growth but this started to diverge since the 1990s in the US.
EU bank relative valuation is still below crisis levels. The banks are taking action by cutting costs . Banks are cutting 77,780 jobs this year the most since 2015. 82% of these cuts are originating from European banks with Deutsche bank topping the list with 18,000 through 2022.
Big read on Amazon from the New Yorker. Worth a read, as Amazon, now the second largest employer in the US, touches more and more companies. This chart shows the growing number of companies mentioning Amazon as a competitive threat in their annual report.
Fedex stock slightly leads/is coincident with the ISM composite. If you think ISM is heading up you should probably be buying Fedex. NB there are non-macroeconomic issues that one needs to consider.
A series of the most popular snippets of 2019 The cost declines of renewable energy compared to conventional energy generation has started to flat line. Real assets are at an all-time low against financial assets. Tech change is exponential. Fertility rates by education is a shocking stat.
Good interview with the always interesting Stanley Druckenmiller . Druckenmiller managed money for George Soros between 1988 – 2000 and was closely involved with the latter’s famous hedge fund bets . He discussed monetary policy and the upcoming US election.
US household debt burden is at very low levels.
US household wealth is at record levels up 50% since the last peak.
Media is a tough business. This article paints a clear picture of what is going on behind the scenes . All told, according to The Columbia Journalism Review, 3,385 journalists lost their jobs in the past 12 months. With some estimates double this figure. Considering there are only 37,000 people classed as reporters in the US these are huge numbers.
This chart suggests that relative to US Bonds equities are fairly priced. It correlates the S&P 500 P/E ratio vs. 10 Year Treasure Yield. Not a perfect correlation but a good guide.
Really interesting model to calculate customer value . This essential tool is used to understand which bit of revenue comes from what customer cohort and combines four models of behaviour. Important reading for anyone analysing stocks but does require further disclosure (the customer cohort chart) from companies.
Interesting chart showing hotel room rates year on year in oil producing regions of the US. Shows clearly how investment is coming out of those markets as drillers focus on cash flows. This hurts periphery services likes hotels. h/t 361 Capital
S&P 500 Financials hit all-time high just once in the last 10 years. For reference the S&P 500 index has done so 236 times.
Inversion is often a powerful thinking tool.One interesting idea from The Market Ear is to invert stock charts. This chart is Apple’s stock price inverted. The question to ask is – would you short more?
Amazon’s logistics investments are coming into their own. They employ 90,000 people and delivered 46% of amazon’s own packages in the latest datapoint. In 2019 they are on track to deliver 3.5bn packages – more than FedEx. Likely a big issue for parcel companies if they open up the network to non-AMZN volume.
The number of new US investment fund launches peaked in 2011. Suggests an industry under significant pressure.
Interesting article about the bank fuelling lending focussed fintechs. They have been writing $1bn of new loans per month all sourced from 15 or so VC backed fintech start-ups. They effectively provide the regulatory infrastructure. Most loans are then sold off with a portion retained. Some choice quotes – “Our strategy is to be the only financial services provider to the fintech ecosystem globally,” Gade says excitedly. “Changing people’s lives is why we do this, before anything else.” … “The talk about a recession or a credit cycle that’s going to start going the other way is much ado about nothing.”
There is a big new trend in the world of finance – direct lending. Private equity firms are grabbing a slice of the leveraged lending market from the big wall street banks. It is leading to lots of competition – leveraged loan syndication fees are down 29%. Apollo think that private could gain as much as 10% share in the $2.5 trillion high yield loan and bond market in the next 5 years. This could be a function of higher bank risk weights eroding balance sheet advantage and huge fund raising capacity of private equity. Returns as well could be an explanation. The risks are clear as more and more lending is slipping into less regulated corners of the financial markets.
The correlation between the components of the S&P 500 index is back to the high correlation zone. This suggests that stocks are moving in unison and is a difficult environment for active management.
WordPress Cookie Notice by Real Cookie Banner
