Deep Trouble, (but) Deep Value: despite [or perhaps because of!] all the bad news, challenges, threats -- a big shift has happened in European equities... (1/x)The combined PE ratio (average of the forward PE, trailing PE, and PE10 ratios) has dropped to extreme cheap levels. It is more or less on par with levels seen:-at the bottom of the dot-com bubble burst bear-and the 2020 pandemic panicThat said, it has yet to plumb the absolute lows seen during the global financial crisis and subsequent European sovereign debt "echo-crisis"Two cautionaries: 1. Although cheap, it could get cheaper.2. The “E” side of of the PE ratio is a moving targete.g. if earnings were to fall fast it could make valuations seem a little bit less cheap than what they appear now...But practically speaking, rather tha

Key Findings from the Latest Monthly pack:Global monetary policy settings are increasingly shifting from headwind to tailwind as inflation falls and economic cycle data remain soft.The major macro dilemma for investors at this stage is the tails; resurgence risk on the one end (growth reaccelerates, inflation resurges), and recession risk on the other end (recession takes hold, deflation comes into focus).The second coming of Trump exacerbates this, with a puzzling policy path potentially pushing up inflation, but also raising recession risk (it will all depend on what gets implemented, how quickly, to what degree, and the second order effects e.g. with fiscal consolidation headwinds).The main upside risks for growth assets would be: a macro middle path (goldilocks, policy perfection), Chi

Learnings and conclusions from this week’s charts:The S&P500 $S&P 500(.SPX)$ failed to retake the 200-day moving average.The next big test is whether current support levels can hold.Semiconductor sales look set to slow significantly.Multiple market cycle indicators are turning down from peaks.Basically it looks like the market tides are going out.The S&P500 attempted and failed to retake the 200-day moving average (+overhead resistance around 5800). This is a very bad sign indeed — the next test will be to see if support can hold around the current levels. Breadth meanwhile also remains on a deteriorating path.Overall, as most muse on what may come in the week ahead (tariff day is coming), I’ve opted to stay focused on what’s observab

With the negative Q1 GDP print of last week and soft CPI reports, the prospect of a disinflationary recession is being raised. One school of thought is tariffs will drive inflation higher, the other school of thought is that tariffs will drive costs higher and squeeze profit margins and discretionary incomes — and end up being deflationary to demand…The possibility of a disinflationary recession would certainly be bond bullish — and as it so happens, we’re just getting into the part of the year which has historically been good for bonds (bonds have had a historical tendency for seasonal strength from May through to October).So just as the seasons are turning bad for stocks, it may now be the season for bonds.For whom haven't open CBA can know more from below:🏦 Open a CBA today and enjoy pr