René Nicolodi

Head of Equities at Asset Management by Zürcher Kantonalbank | Vice-President Swiss Sustainable Finance

[René Nicolodi @R_nicolodi]

Despite latest data on #economicgrowth in the US supporting the likelihood of a #ratecut by the #FED, #BigTech remains under pressure? #marketbreadth and a focus on #valuation could further drive this rotation.

[René Nicolodi @R_nicolodi]

How are #equities behaving after the 1st rate cut? For the #SPX, easing episodes led to increased market #volatility. For the #STOXX, 1st cuts were mostly followed by lower prices, with 2023 being so far an exception.

#FED insight: https://t.co/3XeMGn63NM

[René Nicolodi @R_nicolodi]

Both the #FED and, to a certain extent, the #ECB, are paving the way for September #ratecuts. In the US, a first cut is fully priced in. From a historical & quantitative perspective, we observe that an #easing cycle favors #quality (4.8% p.a.), #momentum (2.8%) & #growth (0.8%).

[René Nicolodi @R_nicolodi]

The #rotation into #smallcaps away from expensive large-cap #tech stocks, continues. How far can this go? Soft landing #sentiment , #ratecut expectations & better #marketbreadth support the move. However, #slowdown risks & renewed political uncertainty could break the #momentum.

[René Nicolodi @R_nicolodi]

It appears that a #smallcap rotation has begun. Lower #CPI increases the likelihood of a #ratecut. The weekly performance of the #RTY (+5.6%) has outperformed the #SPX500 (+1.4%) and #NDX100 (+0.3%). The #rotation, driven by low #valuation and favorable rates, could have momentum

[René Nicolodi @R_nicolodi]

Are we facing another negative year for value?

#earningsestimates for value stocks are closing the gap relative to the growth stocks. Without a more severe #slowdown and considering the extended #valuations of traditional growth sectors, #value might still surprise to the upside

[René Nicolodi @R_nicolodi]

Over the past month #European equities have outperformed US stocks by 2%. Could this short term trend continue? Beyond a beneficial #ratecycle, also #valuation and #profitability metrics, #dividendyield as well as a weaker #EUR could further support the case for 'Europe'.

[René Nicolodi @R_nicolodi]

After last week's turbulences, the #equity market reactions were interesting to watch. #caution seems appropriate for sticky #inflation, #higherforlonger & #growth coming under greater scrutiny. The extended #valuation of #cyclicals relative to #defensives merits attention.

[René Nicolodi @R_nicolodi]

We notice that the correlation between US #treasury yields and #equities trends negatively. The risk of a stubborn #inflation outlook amid a positive economic environment fuels #higherforlonger uncertainties. These could affect #smallcaps with relatively higher levels of debt.

[René Nicolodi @R_nicolodi]

The events in the middle east have triggered a certain level of #anxiety. Could a more persistent risk-off sentiment prompt a faster search for #value?

Relative #sector weights indicate that in #IT value stocks are rare. Within energy & financials it can be found in plenty,

[René Nicolodi @R_nicolodi]

#Equity markets on the rise and #momentum continues to be the main force this year. Are #equities melting up?

While #fomo is be present in concentrated parts of the market, #fundamentals indicate that broader optimism is still based on positive #growth & #inflation expectations

[René Nicolodi @R_nicolodi]

Last week's SNB rate cut came as a surprise. What does it mean for #swissequities?

We note that in relative and historical terms the #Swiss market currently looks more attractive than most regions. The SNB rush forward could be a short-term positive impulse.

[René Nicolodi @R_nicolodi]

Strong upside #pricemovements are not reaching pre #Dotcom levels yet, but are above their long-term median. An low #marketbreadth with high market #concentration could be interpreted as a warning
Short term corrections should not come as a surprise at this stage of the #rally

[René Nicolodi @R_nicolodi]

Are #equitymarkets in or near dangerous territory?

From a standalone #valuation perspective different metrics for global equities are above their long-term #median since 1997. However, in comparison to pre #GFC and pre #Dotcom levels current values do allow clear-cut conclusions

[René Nicolodi @R_nicolodi]

The % of #stocks outperforming MXWO over 1Y has reached levels not seen since #corona and the #dotcom bubble in 2002.

MTD we notice nervousness among the #magnificent7 and #SPW500 beating #SPX500

This could mean improving #marketbreadth, without ending the #megacap dominance.

[René Nicolodi @R_nicolodi]

At #supertuesday more than a third of available delegates are at stake. A #trump vs #biden rematch is expected. From an #equity view #volatility triggers merit attention during the 🇺🇸election. Such as:
- fiscal policy
- trade policy &🇨🇳
- monetary policy & the FED's
-⛽️& climate

[René Nicolodi @R_nicolodi]

Our #models indicate that IT (YTD: +9.9%) is supported by strong #momentum and #quality. Financials (+5.2%) & comm serv (+8.8%) profit from momentum too and from a moderate #valuation (financials).

On the flipside: systematic data looks weak for cons. staples and real estate.

[René Nicolodi @R_nicolodi]

After NVIDIA 's results the #mag7 continue to impress.

The European counterpart - labeled #granolas by Goldman Sachs - are worth a look for their #differences to and #similarities with the Mag7.

Both merit attention from both a regional as well as global #equities view.

[René Nicolodi @R_nicolodi]

Last week's US #cpi release rose more than expected and affected forecasts regarding the timing and number of interest rates cuts.

#equities so far appear not be impressed by the risk of a more persistent inflation and the prospect of a less steep & aggressive easening ... yet.

[René Nicolodi @R_nicolodi]

#Renewables, particularly in EU, have faced a though year in 2023. Higher #costs, price pressures and #geopolitical tensions took their toll.

Are we close to a bottoming-out? On the back of depressed valuations, lower interest rates could increase the support for the theme