🇮🇹 Cosa fare con l'economia USA surriscaldata (Davide Serra)
Summary
TLDRThe speaker discusses global economic trends, highlighting the focus on electrification and digitalization. They mention the US economy's high deficit and the Federal Reserve's intention to cut back, which may lead to a steeper yield curve and a potential rise in the decade ahead. In Europe, growth is modest, and the Central Bank of Europe is cautious, while Switzerland has already cut rates. Asian markets, particularly China, face structural issues, but investment sentiment is shifting towards support. Japan is exiting zero and negative rates, signaling a clear direction. Overall, the speaker foresees a moderately inflationary economy with positive growth in credit volumes and favorable conditions for the financial sector, which has underperformed in recent decades.
Takeaways
- 🌐 Global meetings have highlighted the crucial theme of electrification and the continuation of digitalization within economies.
- 🇺🇸 The United States is managing a 'hot' economy with significant fiscal and current account deficits, yet the Federal Reserve intends to cut back.
- 📈 Despite the potential for a steeper yield curve, short-term rates may decrease, which is beneficial for financial institutions.
- 🇪🇺 In Europe, growth is modest, and the Central Bank of Europe (CB) is slightly behind the curve on interest rate cuts, but there's no recession.
- 🇨🇳 China is not rebounding strongly, with structural issues persisting, leading to a shift in investor sentiment regarding its investability.
- 🇯🇵 Japan is at a historic moment, exiting zero and negative interest rates, indicating a clear direction for the future.
- 💹 The financial sector is expected to perform well, with equities trading at 5-6 times earnings and offering 8-10% dividends for the coming years.
- 📉 The bond market has already discounted much, with government or investment-grade bonds yielding higher returns than U.S. Treasuries.
- 🚀 Financials offer significant value in the current economic setup, with positive growth in credit volumes and favorable interest rates.
- 🔄 Inflation is expected to be somewhat higher due to U.S. fiscal and monetary policies, but the financial sector is poised to deliver strong results.
- 📈 Overall, the financial sector is set to thrive in both equity and credit markets, given the macroeconomic conditions.
Q & A
What is the main theme being discussed in the meetings the speaker attended?
-The main theme discussed in the meetings is the electrification of the entire economy and the continuation of digitalization, with a focus on machine learning and artificial intelligence as the latest phase of digital transformation.
How does the speaker describe the current state of the United States economy?
-The speaker describes the U.S. economy as 'hot', with a fiscal deficit of 78% and a current account deficit of 23%, leading to nearly a 101% overall deficit. The U.S. is managing this economy despite the Federal Reserve's intention to cut back.
What potential economic change does the speaker foresee for the United States?
-The speaker foresees a possibility that the yield curve may become steeper, suggesting that the 10-year yield may eventually rise, despite short-term yields potentially falling. This could create opportunities in the financial sector.
What is the current economic situation in Europe according to the speaker?
-Europe is experiencing modest growth but is not slowing down significantly, meaning there is no recession. The European Central Bank is slightly behind on interest rate cuts compared to the economy's needs, possibly due to misjudging temporary inflation in 2020-21.
What has been the recent trend in the Asian economy, specifically China?
-China is not rebounding as strongly as expected, with structural issues continuing to persist. Investors have largely exited the market, leading to a perception that China is no longer investible. However, the speaker suggests that at current levels, China may find support due to the lack of investment.
What significant change is happening in Japan's economy?
-Japan is experiencing a historic moment as it moves out of zero and negative interest rates. Although the change is small, the direction is clear, and the yen at 150 offers significant value in terms of currency.
What is the speaker's overall economic outlook?
-The speaker sees a fundamentally higher inflation environment due to U.S. fiscal and monetary policy, with Europe experiencing slightly less growth. Despite this, the economy is not in recession, and credit volumes are starting to pick up.
How does the speaker view the financial sector's performance in the next few years?
-The speaker is optimistic about the financial sector's performance, expecting it to do well in both equity and credit. Financial stocks are currently underperforming and offer attractive valuations with 5-6 times earnings and 8-10% dividends.
What is the speaker's perspective on the bond market?
-The speaker believes that the bond market has already discounted a lot, with many bonds yielding 5% when U.S. Treasuries are at 4-4.5%. This suggests that the market has already factored in the monetary policy of the next 3-6-9 months.
What potential risk does the speaker identify for the bond market?
-The speaker identifies a potential risk that at some point, inflation could be worse than expected, which could impact the bond market negatively while the financial credit continues to perform well.
Why does the speaker believe that financial companies offer significant value?
-The speaker believes that financial companies offer significant value due to their current underperformance over the past 20-30 years, attractive valuations, and the expectation of higher profits from the current interest rate environment and volume growth.
Outlines
🌐 Global Economic and Policy Update
The speaker provides an update on a series of meetings held over the past two months with various administrators and policymakers. The main theme discussed is the electrification of the economy and the continuation of digitalization, with a focus on machine learning and artificial intelligence as the latest phase. The United States is managing a 'hot' economy with significant fiscal and current account deficits, yet the Federal Reserve has indicated a desire to cut rates. This could potentially lead to a steeper yield curve and a possible rise in the decennial trend despite short-term dips. In Europe, growth is modest but stable, with no signs of recession. The Swiss National Bank has already cut rates, indicating a similar move may be on the horizon for the European Central Bank.
Mindmap
Keywords
💡Electrification
💡Digitalization
💡Deficit
💡Monetary Policy
💡Inflation
💡Investors
💡Interest Rates
💡Financial Stocks
💡Bonds
💡Growth
💡Macroeconomic Setup
Highlights
Global meetings and interactions with various administrators and policymakers over the past two months.
A common theme among these meetings is the electrification of the entire economy.
Machine Learning and Artificial Intelligence are seen as the latest phase of digitization.
The United States continues to manage a 'hot' economy with significant fiscal and current account deficits.
The Federal Reserve's intention to cut rates despite the hot economy may lead to a steeper yield curve in the future.
Europe's growth is not significant, but there is no recession, with the ECB slightly behind on rate cuts.
Switzerland's central bank has already cut rates, indicating a cautious approach towards temporary inflation.
China's structural issues persist, but investor sentiment has shifted, making it potentially undervalued.
Japan's historic move out of zero and negative interest rates, signaling a clear direction for the Yen.
An overall economy with slightly higher inflation due to US fiscal and monetary policies.
Europe experiences less growth but is not in recession, with positive growth volumes重启.
Interest rates are expected to remain at 3-4% in the United States and 2-3% in Europe.
The financial sector, which has underperformed in the last 20-30 years, is now poised to do very well.
Stocks are trading at 5-6 times earnings and offering 8-9, 10% dividends for the next few years.
The bond market has already discounted a lot, with many bonds yielding 5% while US treasuries yield 4-4.5%.
There is a risk of worse-than-expected inflation, but financial credit is expected to perform well.
Financials offer a lot of value in the bond market, while other sectors may not offer as much.
Societies will make more profits with the current setup of interest rates, margins, and volumes.
Transcripts
Buongiorno a tutti Volevo darvi un
update su tutta una serie di meeting che
ho fatto negli ultimi due mesi dove ho
avuto la possibilità di viaggiare per il
mondo e avere un sacco di incontri con
amministratori legati di vari gruppi e
ascoltare alcuni dei più importanti
Policy
Makers il tema cruciale che tutti stanno
affrontando è l'elettrificazione di
tutta l'economia e chiaramente
continuazione della
digitalizzazione all'interno di tutto
ciò machine Learning artificial
intelligence non è altro che l'ultima
versione della
digitalizzazione dal punto di vista
geografico gli Stati Uniti continuano a
gestire un'economia che si dice hot Cosa
vuol dire che hanno un deficit del 78%
Fiscale Current account del 23 quindi
hanno quasi un 101% eh deficit sono
quasi un trilione di dollari ogni 100
giorni che devono trovare ma
fondamentalmente Stanno gestendo
un'economia particolarmente hot la Fed
nonostante ciò Ha detto che vuole
tagliare e questo secondo me crea una
possibilità che un certo punto la curva
Inizi a essere più Steep ossia che il
decennale prima o poi possa risalire
nonostante il la curva a breve possa
scendere questo è super positivo per i
finanziari in Europa la crescita non va
un granché però al contempo non stiamo
rallentando quindi fondamentalmente non
c'è decrescita Siamo sullo zero più tra
lo Zer e l'un e al contempo l'
CB è leggermente indietro sul taglio dei
tassi rispetto
all'economia
probabilmente avendo sbagliato Temporary
inflation nel
2020-21 è un po' più cauta e
probabilmente ragione però abbiamo già
il primo segnale addirittura la banca
Svizzera ha tagliato i tassi prima dell'
CB Ecco questo per darvi un'idea di dove
siamo quindi siamo ormai arrivati in
situazione lcb sicuramente dovrà
tagliare addirittura la Banca Centrale
svizzero gliel'ha fatto
prima dal punto di vista invece asiatico
la Cina non sta ripartendo più di tanto
i problemi strutturali continuano a
essere presenti al contempo Però tutti
gli investitori Ormai sono scappati e è
diventato una moda dire che la Cina è in
investibile quindi a nostro avviso
probabilmente a questi livelli si
inizierà a trovare un supporto per il
fatto che ormai non c'è più quasi
nessuno in Cina che ha
investito Giappone grande momento
storico escono dei tassi zero e negativi
anche se di poco ma la direzione è
chiara e secondo no lo Yen a 150 in
termini relativi di valute offre un
sacco di
valore comunque ci ritroviamo in un
un'economia che fondamentalmente avrà
un'inflazione un po' più alta
soprattutto per la politica fiscale
monetaria degli Stati Uniti in Europa un
po' meno crescita ehm però comunque non
stiamo scendendo non siamo in recessione
e tutto ciò fa sì che ci troviamo ad
avere crescita positiva volumi che
ripartono soprattutto dal punto di vista
di credito Ma soprattutto tassi che
rimarranno 34 negli Stati Uniti e 2-3 in
Europa Questo è uno scenario super
positivo per i finanziari che hanno
sottop performato negli ultimi 20-30
anni ed oggi troviamo azioni Eh che
trattano A 5-6 volte gli utili Eh e 8 9
10% addirittura di dividendo
ehm per i prossimi anni quindi secondo
noi il settore finanziario continuerà a
fare benissimo sia l'equity che il
credito per questo setup macro Altro
punto Eh secondo noi eh il mercato
obbligazionario ha già scontato
tantissimo eh Cioè se guardiamo alcuni
Bond ad esempio a yield rendono il 5%
quando abbiamo Us treasury che ne rende
44 Ecco quindi secondo noi buona parte
del mercato obbligazionario che siano
governativi o investment grade o
addirittura parte della yield è già
arrivato vuol dire che stanno già
scontando la politica monetaria dei
prossimi 3 6 9 mesi e al limite ad oggi
c'è quale rischio che poi a un certo
punto app ci troviamo un dato di
inflazione peggiore di quelli previsti
mentre il credito finanziario continua a
rendere molto di più ma soprattutto le
società faranno molto più utili con
questo setup di tassi margini e volumi
quindi secondo noi in obbligazionario il
finanziario offre tantissimo valore
tutto il resto mica
tanto
ah
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