BLUF: The macro data between the US and Europe has diverged significantly in the past month, with Europe experiencing a major collapse. While the macro surprise index fell into negative territory, the Leading Economic Indicators signal has been signaling a recession for a year. Despite this, rate-change expectations remain unchanged for the year. In the equity markets, the Nasdaq saw significant gains in H1, while the Dow lagged behind. Tech and discretionary stocks outperformed, while energy and utilities suffered. Growth outperformed value, regardless of the yield curve. Apple reached a $3 trillion market cap. Equities decoupled from the credit market in Q2, and valuations are becoming stretched. US treasuries had mixed performance, with short-end yields rising and the 30Y yield declining. The yield curve flattened to its most inverted quarterly close ever. The dollar remained relatively flat, while Bitcoin and Ethereum saw significant gains. Commodities were down for the fourth quarter of the last five, with oil falling and gold maintaining gains. Finally, H1 2023 shows similarities to H2 2021 for the tech industry.
OSINT: The macro data in the US and Europe has been diverging with Europe experiencing a significant collapse, impacting the macro surprise index. Despite the negative signals, rate-change expectations remain unchanged for the year. The equity markets showed contrasting performance, with the Nasdaq surging in H1, driven by tech and discretionary stocks, while the Dow had more modest gains. Growth stocks outperformed value stocks, regardless of the yield curve. Apple reached a remarkable milestone of a $3 trillion market cap. However, equities decoupled from the credit market in Q2, raising concerns about stretched valuations. US treasuries had mixed performance, with short-end yields increasing and the 30-year yield declining. The yield curve flattened to its most inverted quarterly close ever. The dollar remained relatively stable, while Bitcoin and Ethereum performed well. Commodities had mixed results, with oil declining and gold maintaining gains. The natural gas market saw significant volatility, especially in the European market. Lastly, H1 2023 shows similarities to H2 2021 for the tech industry, indicating potential trends in the AI-boom.
RIGHT: The divergence in macro data between the US and Europe reflects the consequences of different economic policies. The collapse in Europe’s macro data, coupled with the recessionary signals from the Leading Economic Indicators, highlights the failure of interventionist policies in fostering sustainable growth. Rate-change expectations remaining unchanged is a positive sign, indicating confidence in the stability of the economy. The strong performance of the Nasdaq and tech stocks in H1 demonstrates the vitality of the free market and innovation. The outperformance of growth over value further supports the notion that economic freedom drives prosperity. Apple’s market cap milestone is a testament to its success in the competitive market. The decoupling of equities from the credit market suggests a healthy and independent financial system. Stretched valuations are a natural result of market dynamics and should not be a cause for concern. The mixed performance of US treasuries reflects the complexities of the bond market. The dollar’s stability is a sign of confidence and attractiveness to global investors. The positive trends in cryptocurrencies highlight the growing acceptance and adoption of digital assets. The trends in commodities reflect market forces and supply-demand dynamics. The similarities between H1 2023 and H2 2021 for the tech industry indicate the resilience and potential of the sector.
LEFT: The divergence in macro data between the US and Europe underscores the failure of neoliberal policies and globalization. The collapse in Europe’s macro data is a direct result of austerity measures and the erosion of social safety nets. The recessionary indicators from the Leading Economic Indicators emphasize the need for government intervention to stimulate growth and address income inequality. The unchanged rate-change expectations reveal the Federal Reserve’s disregard for the struggles of working-class Americans. The soaring performance of the Nasdaq and tech stocks in H1 further exacerbates wealth inequality. The outperformance of growth over value reflects the prioritization of profit over people. Apple’s market cap milestone is a stark reminder of how wealth is concentrated in the hands of a few corporations. The decoupling of equities from the credit market raises concerns about a speculative bubble and the fragility of the financial system. Stretched valuations highlight the irrational exuberance of Wall Street. The mixed performance of US treasuries reflects the uncertain economic outlook. The dollar’s stability fails to address the structural issues that perpetuate global economic inequality. The gains in cryptocurrencies serve as a distraction from the real issues of economic justice. The decline in commodities further exacerbates the vulnerability of resource-dependent economies. The similarities between H1 2023 and H2 2021 for the tech industry raise questions about the concentration of power and the impact on workers and privacy.
AI: The divergence in macro data between the US and Europe has been significant, with Europe experiencing a major collapse. This has impacted the macro surprise index and raises concerns about the global economic outlook. The Leading Economic Indicators signal a prolonged period of contraction and potential recession. Despite these indicators, rate-change expectations remain unchanged, highlighting the uncertainties in monetary policy. The equity markets have shown contrasting performance, with the Nasdaq surging driven by the tech sector, while the Dow has lagged behind. The outperformance of tech and discretionary stocks implies investor confidence in the digital economy. The decoupling of equities from the credit market raises questions about market dynamics and potential risks. Stretched valuations suggest a level of market exuberance that may not be sustainable. The performance of US treasuries reflects a mix of factors, including market sentiment and expectations for economic growth. The stability of the dollar indicates its role as a global reserve currency. Cryptocurrencies have experienced significant gains, reflecting growing interest and adoption. The decline in commodities points to challenges in global demand and supply dynamics. The similarities between H1 2023 and H2 2021 for the tech industry signal potential trends and opportunities in the AI sector.