No slowdown in sight
In the United States, the number of mentions of "economic slowdown" is at its lowest level since 2007. This is what emerges from an analysis of conference calls during the last earnings season.
Source: Bloomberg
This statistic is quite surprising, as, at the same time, there are concerns about a slowdown in the labor market. Last week, the Challenger survey showed that layoff announcements had exceeded 1 million for the first time since 2009.
But for now, confidence remains high. Stock indices are close to record highs, AI continues to drive growth, and earnings revisions are still trending upward.
US markets summarized in one chart
This is nothing new: Wall Street is dominated by a handful of mega-caps that drive index performance. These are a few stocks that were once known as GAFAM and are now called the Magnificent Seven (with Nvidia and Tesla).
Over the past six years, these stocks have outperformed impressively. The index comprising the Magnificent Seven has increased 13-fold, compared with only 3.5-fold for the index comprising the other 493 stocks in the S&P 500.
Source: Apollo Global Management
Companies more reliable than governments
This is a phenomenon that has been observed for several months: companies borrowing at lower rates than their governments. Examples include Airbus, L'Oréal, and LVMH in France, and Microsoft in the US.
Source: Bloomberg
This is a sign of the times: public debt has exploded and deficits are no longer really under control. In this context, investors consider large companies with extremely solid balance sheets (lots of cash, no debt) to be safer than their governments. This has led to a spread in their favor.
