9 Sept 2021
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Long Term Trends
This site is worth a look. It gives a monthly look at, well, long term trends. It shows that valuations for US equities are really very stretched indeed. The site gets its data from Quandl, mainly, which seems to have been bought by NASDAQ. I find I can actually access this via TradingView, so here is the Shiller SPX P/E Ratio:
I think we can all agree that it’s kinda scary, when the earnings of the biggest, most global companies in the world cannot raise their earnings yield above the rate of inflation.
Wrap
Fairly risk-off again. Commodities weak, especially oil. Bonds strong, 10Y now at 1.3% yield. Currencies showing risk off traits: JPY up 0.5%. No obvious trigger. The ECB has said it’s slowing down it’s buying of bonds, but keeping its balance sheet at its current size until at least next March. Presumably, the continuing disruption due to Covid is the cause. I had a chat in the pub last night, and I have to say that I was quite surprised at how cautious the group was about having life “returning to normal.” I cannot see things being fully back to normal for at least another six months.
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