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This chart “shows the average annualized outperformance of stocks after they’ve become one of the largest top 10 in the S&P 500.”
“As you can see, the top 10 largest companies underperform by an average of -1.5% over the subsequent 10 years.”
Source .
Has been on a bit of a tear recently (TOPIX +19%).
It really is a stand-out market – 53% of companies trade below book value.
Change is afoot – Tokyo stock exchange sent letters to all of these urging them to set concrete plans to reverse this valuation.
Source: Schroders .
Chart decomposing the outperformance of MSCI US vs. MSCI EU from 2010 until last year.
Source .
After a recent rally, the discount is back to its post-2011 average.
A nice set of six charts showing how cheap the UK is.
The UK trades at a near-record 40% forward P/E discount to the US and 20% vs the EU.
Almost every industry, as seen in the chart, is cheaper than the US.
A topic Snippet has covered a few times.
For example – (1) how to adjust valuation for intangible assets (here ) and (2) why some people confound their importance (here ).
This is a great webcast with Michael Mauboussin and Kai Wu on the topic – (requires sign-up; grab a free two-week trial here ).
Rare to see this level of positive surprises when a recession is expected.
Source: themarketear.com .
“Demand downturn” overtook “cost cutting” as a key reason for layoffs.
h/t DailyShot .
Really something that QQQ relative to Russel 2000 (IWM) is almost back to 2021 peak with record speed.
Source: themarketear
Many investors look at the headline PMI number (46.3) but some of the guts of the release are well worth reading.
FXmacro newsletter pulls the main quotes and categorises them into positive and negative. Very useful and worth subscribing.
Typically a sign of economic turbulence.
Source: Daily Shot.
According to Stifel (via themarketear) historically stocks trade in a range and only start to properly struggle when recession is clear.
Fintech is getting more recognition in the new GICS changes.
As of March 17th, 11 S&P stocks will be reclassed out of IT and eight of them will land in Financials, into a new sub-industry focussed on payments.
This will raise the Financials weight to 14% from 11% – though clearly reducing the weight of banks within that, at an interesting point in time.
Source .
Equities typically bottom some time after the first rate cut, based on historic bear markets since 1984.
h/t themarketear.com
Most of the earnings cuts have been to Q1/Q2 2023E.
The typical pattern of an H2 recovery is still assumed.
h/t themarketear.com
Money supply in developed markets keeps decelerating.
In the US it’s in correction territory, for the first time since 2006.
h/t: Daily Shot.
Equities are following a no-recession path currently.
If one does happen, things could look very different.
Source: TS Lombard via themarketear .
The quality of reported earnings in the US has been deteriorating.
Source: Bernstein .
Calm begets more calm, volatility begets more volatility.
Source .
2022 saw a new record in off-exchange trading of US ETFs.
Part of a broader trend where trading off-exchange in US equities went from 35% in 2015 to 43% last year.
Yet, as the FT Alphaville article notes, “ETF shift from lit to off-exchange trading has actually been even starker than it has for equities as a whole “.
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