Please find below the 5 charts that tell interesting stories on Markets and Investing.

1) US Fed is choking the life out of global liquidity:

The 10-Year Treasury yield has moved up to 4.3%, its highest since December 2007.

Real yields (adjusted for inflation expectations) of 1.97% are the highest since July 2009.

Next 6 months are not going to be easy for Emerging Markets, Equities, PE, VC and Gold. 

The relief is expected to come when US Fed starts cutting interest rates hopefully in early 2024.

2) War Chest is ready for coming Bull Market Rally:

Exposure in Money Market Funds has hit record high of USD 5.1 Trillion.

People are parking funds in money market as they are getting interest of 5.5% in USD.

When US Fed starts cutting rate, this money will flow into equities and other volatile assets.

3) Global Equity Market - Analysis:

1) India is relatively the most expensive market with 1 Y Fwd PE of 20.1
2) US is also expensive and US Tech is meaningfully overvalued due to AI rally. Stocks beyond Tech companies are fairly valued. 
3) Emerging Markets and Europe have attractive valuation.
4) Vietnam and China looks good.

4) Big is becoming Bigger in India:

Consolidation of top companies across sectors is happening in India.

Majority of the sectors are seeing top players capturing significant market share.

This is enabling less competition and an oligopoly kind of scenario is playing out in many sectors.

*Spark Capital

5) Small Cap - The Star Performers:

1) In the last 10 years, Small Caps have outperformed Mid Caps and Large Caps for 6 times. Super consistent.
2) Small Caps have been the best performer in last 3 years as well - 2021, 2022 & 2023.

All portfolios need to have good exposure to Small Caps if time horizon is long (5 to 7 Years).

Read more similar articles in our blog - https://alphacapital.in/blog/

Best Regards

Dr. Mukesh Jindal CFA, CFP, CAIA, Ph.D.

Alpha Research