Markkinoita koskevia kesäisiä näkökohtia
Sekä Pohjoismaissa että Yhdysvalloissa suurin osa ihmisistä pitää kesälomansa heinä- ja elokuussa, kun taas EU:ssa elokuu on merkittävin lomakuukausi. Näin ollen olemme nyt suunnilleen puolivälissä ajanjaksoa, jolle on ominaista lomailevien sijoittajien ja kauppiaiden lomailu, kesäaiheiset pääkirjoitukset ja yleisesti ottaen vähäisempi aktiivisuus markkinoilla. Vaikka liikevaihdon määrä on yleensä pienempi, markkinat eivät ole suljettuina. Välittäjien ja yritysjohdon loma-aika merkitsee sitä, että kesäkuukausina nähdään vähemmän fuusioita, yritysostoja ja muuta vastaavaa. Yritysten toisen vuosineljänneksen tulosten raportointi sekä viranomaisten ja keskuspankkien tärkeiden makrolukujen esittäminen jatkuu kuitenkin tavalliseen tapaan.
Sources to market information
Someone who follows the market has to deal with a flow of information which to varying degrees supports the view one has, and which is of a different nature. I personally think that objective real-time information is most important. Among these you will find market prices (e.g. share prices), as well as forward-looking messages such as interest rate changes from central banks or new guidance from companies.
Next, you will get historical information of varying importance. Among these are the companies' presentation of accounting figures for the previous quarter, as well as the authorities' and organizations’ regular presentation of periodic figures. What these have in common is that they describe a time that is behind us. Nevertheless, they can have significant influence in the market if they surprise, and thus change the market participants' perception of likely future developments.
In addition to this, one will see a flow of comments from others who follow or operate in the market. Managers, investors, traders, stock strategists, brokers, economists and journalists publish their own reports and posts in which they flag their views, and they often figure in the media. All of this can provide valuable information.
Mixed input – rising stock prices
When you look at the flow of news that has come in in recent weeks, it is as always a mixed picture. I will nevertheless try to highlight some general considerations, as I see them.
Higher interest rates – increased cost of capital
The first thing to note is that monetary policy continues to be tightened in most of the major economies. Interest rate hikes have continued in both the US and the EU, and recently Japan also made a somewhat unexpected move in a tighter direction. The only significant exception is China, which continues to stimulate. After being at record lows, it can now be said that interest rates are at a normal to even high level in most places. It is natural to assume that the capital costs are beginning to be felt for both companies and households, and that fixed-income securities at the same time provide a more competitive return compared to shares than for many years. This should have been negative for shares, but the focus in the market seems to be that the cycle of interest rate hikes will soon be over.
Mixed macro numbers
Many of the macro figures that have come in show a weaker trend in the economies but are at the same time perhaps somewhat better than expected. To draw some general lines, one could say that the American economy is holding up somewhat better than expected, China continues to show signs of weakness, while the EU is somewhere in the middle. The focus in the market seems to be that the US may avoid recession, and that belief in this is stronger than a few months ago.
Decent company reports
In the US in particular, reporting of the numbers for the second quarter has made a decent start. The general impression so far must be said to be on the slightly positive side. One could perhaps say that many of the figures are better than feared, and that the guidance from the companies has not frightened investors either.
Vahvat osakemarkkinat Yhdysvalloissa - muutoin vaihtelevampi tilanne
Pohjoismaissa Oslossa, Kööpenhaminassa ja Tukholmassa käydään kauppaa suunnilleen samoilla kurssitasoilla kuin helmikuussa, joten ne ovat tuottaneet lähes nollatuoton viimeisen kuuden kuukauden aikana. Samana aikana Suomen OMXH25 on laskenut noin 12 %. Saksan DAX on ollut positiivisempi plussalla. 8 % viimeisten kuuden kuukauden aikana, kun taas Iso-Britannia on laskenut 1 %. Yhdysvallat on yleisesti ottaen ollut huomattavasti vahvempi: S&P 500 on noussut 14 % ja NASDAQ 100 peräti 30 %. Tämä havainnollistaa hyvin artikkelissa kuvaamani seikan kapeista markkinoista, joka johti siihen, että NASDAQ toteutti tässä kuussa harvinaisen tasapainotuksen vähentääkseen suurimpien teknologiaosakkeiden painoa.
Increasing skepticism among some strategists
There are many people who have interesting comments about the market, and you can find valuable information also from those with whom you do not agree, or who operate on a different time horizon than you do yourself. Personally, I prefer to listen to those who themselves handle larger positions in the market, and who have done so for a long time and thus experienced several market cycles. One of these is Hussman Funds, which regularly publishes insightful comments on its blog. In one of the latest posts, they point out that their indicators now show a rare unfavorable combination of conditions that have historically been a sign of an upcoming period of weak returns. They point out that they will not try to "time" a peak, but for the most important valuation indicator, only the period around the market peak in 2021 shows more unfavorable values than now... then in a time series that goes back to 1947. One can find the detailed post on their website.
At the same time, strategists at one of the major US banks recently pointed out that buying options to hedge downside risk had never been cheaper than now. They substantiate this with their own numerical material, but also the well-known VIX index now shows low values that we have not seen the likes of since the beginning of 2020.
Summary
We can conclude that increased interest rates have made capital costs and alternative returns higher than we have seen since the Financial Crisis in 2008. The market boom, especially in Tech, has been going on for a long time, and to such an extent that NASDAQ felt compelled to carry out a "special rebalancing" which has only been done 2 times previously in history (hint, not at market bottoms). The company figures have been better than feared, but the price run-up for some of the large tech companies in particular has been greater than the improvement in the figures. They have thus become significantly more expensive. The technical trends in the charts are largely up, but the upswing has continued continuously for so long that many momentum indicators are now stretched. At the same time, the mood among investors seems to be very optimistic, and the price of downside protection historically low.
So how should this be viewed? Like Hussman, I do not want to predict any market tops. Timing these is notoriously difficult, and I don't see a one-sided negative picture in the market either. Nor will there be a forest fire just because the weather is warm, and the grass is dry. One needs a spark, a catalyst to start a negative cycle. This currently seems to be missing from the market, and then you just have to enjoy the summer for as long as it lasts.