Bubbles/Crises/Manias
GAI technology has made tremendous gains over the past year. It has advanced from being a mere “curiosity” to becoming an everyday helper. While the promise of GAI is enormous, its effects are still limited: Companies are still struggling with monetization while productivity improvement is still at least a year away. In terms of evolution, the focus is shifting away from “picks and shovels” infrastructure companies toward model and application developers.
Our Emerging Market Strategy (EMS) colleagues recommended booking an 11.4% gain on their Egyptian T-bill trade initiated earlier in the year. Now that currency-devaluation risk has been removed from the picture for the foreseeable future, they are…
According to BCA Research’s European Investment Strategy service, the underperformance of European assets relative to the US is due its lagging productivity, even after adjusting for sectoral compositions in their stock markets. Structurally, European…
As we highlighted in a previous Insight, the breadth of the US equity rally has been relatively narrow, led by extremely strong gains among Big Tech stocks. Tech is still the best performing sector, with the S&P IT price index up 12% year-to-date on top…
Nvidia’s blowout Q4 2023 earnings results and bullish guidance catalyzed a rally in global stocks that pushed the S&P 500, Europe’s Stoxx 600, and Japanese Nikkei to record highs on Thursday. The S&P 500 is already expensive. It is true that Big…
The rally in cocoa prices has intensified over the past two months. Prices are up 47.7% so far in 2024 on top of a 61.3% increase last year. There are fundamental reasons for the price surge. Drier weather due to the El Nino weather phenomenon have led to…
Chinese policymakers surprised on Tuesday with greater-than-anticipated easing for the troubled property market. Although the 1-year loan prime rate (LPR) – the benchmark for most household and corporate loans – was kept unchanged at 3.45%, the 5-year LPR –…
According to BCA Research’s European Investment Strategy service, European tech stocks could outperform their US counterparts in the last leg of the rally. The tech sector is in a bubble in advanced economies. While it is logical to expect a pronounced…
The S&P 500 forged a new all-time high last Thursday and ended the week with a 4.9% year-to-date gain, extending the rally that started in late-October. Interestingly, the recent increase comes even though investors have priced out a Fed rate cut in March…
Signs that we are entering the last phase of a bubble are building up. Can European equities benefit from a new tech mania?