2022.01.03 Weekly notes

LAST WEEK’S ACTION

A LOOK AT TAPERING & QT TRENDS

US10year real (Orange) and nominal (White) yields, 3month rolling change in bps
SPX (Orange) NDX (Purple), 3month rolling %change
NDX/SPX ratio, 3month rolling %change
JPM EMFX index (Orange) and EURUSD (Blue), 3month rolling %chg

CROSS-ASSET IMPACT

IRRATIONAL EXUBERANCE?

“… we end the year with valuations high in the US at least. On a cyclically-adjusted price/earnings ratio, the US market is more overvalued than in 1929 1973 and 2007. Inflation is rising, central bank stimulation fading and Omicron is upsetting the already fragile apple cart. Not exactly the Goldilocks scenario is it?”

SUMMARY

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