Macroeconomic One Pager
The countdown to the beginning of the cycle of monetary easing in advanced economies, starting with the U.S., continues. Downbeat economic data or signs of lower consumer inflation improve market sentiment and investors place bets on more ambitious rate cuts happening earlier in the year, whereas reports in the opposite direction undermine asset prices. In the meantime, intriguing phenomena are occurring. For instance, the S&P 500 stock market index has returned a handsome 28% 12 months through February 29th but there is a twist. In the same period the return of a subindex comprising of the 10 largest listed companies, a sample heavily biased towards Information Technology (IT), was a jaw-dropping 60%. Therefore, everything else reduced overall performance by 32 percentage points.1
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