China may be following the path set by Japan in the 1990s. China's household debt has reached 62% of GDP (up from 28% a decade ago), and its corporate debt reached 160%. Japan similarly had household debt peak at 60% and corporate debt peak at 145%. 1
In this elevated interest rate environment, the S&P 500’s high-dividend stocks are underperforming. Non-dividend paying stocks have gained 20.4% YTD, while the top 100 highest-yielding stocks are down -3.5%.*2
The use of cash in transactions has continued to drop. Cash accounted for just 18% of payments in 2022 (down -13% from 2016), while credit-card use rose to 31% over the same period. 3
Nvidia now has the highest valuation among the 500 largest US public companies. Of the 231 companies that had similar valuations over the last 50+ years, only 20% beat the market over the following year, with a median loss of 36%. 4
The International Economy - "China Will Be The Next Japan"
The Irrelevant Investor - "Animal Spirits: How Much is Happiness Worth"
Barrons- "Visa and Mastercard Are Under Attack. They Will Do Just Fine."
The Irrelevant Investor- "Animal Spirits: Do Valuations Matter?"
*Past performance is not indicative of future performance
Economic Calendar
Monday:
None scheduled
Tuesday:
Richmond Fed President Tom Barkin speaks, Existing home sales (Jul), Chicago Fed Austan Goolsbee speaks, Fed Gov. Michelle Bowman speaks
Wednesday:
S&P flash U.S. services PMI (Aug), S&P flash U.S. manufacturing PMI (Aug), New home sales (Jul)
Thursday:
Fed officials interviews from Jackson Hole summit, Initial jobless claims (Aug), Durable-goods orders (Jul), Durable-goods minus transportation (Jul)
Friday:
Powell gives opening speech at Jackson Hole summit, U Mich consumer sentiment, final (Aug)
US Futures*
S&P 4,374.76 +0.12%
DOW 34,372.30
-0.37%
NASDAQ 13,364.85
+0.55%
World Markets*
FTSE 7,264.14
+0.02%
NIKKEI 31,565.64
+0.37%
HANG SENG 17,623.29 -1.82%
*values as of 10:30 AM EST 8/21/2023
Treasuries*
2 YR4.994%
10YR 4.344%
30 YR 4.464%
Cryptocurrencies*
BTC-USD
26,068.35-0.28%
ETH.CM
1,671.54 -0.42%
^CMC200
566.14-0.10%
Currencies*
Euro $1.0881
Pound $1.2730
Yen $146.1900
Commodities*
Gold 1,916.80
+0.01%
WTI Crude 81.34
+0.11%
Silver 23.02
+1.24%
Upcoming Earnings Calls
Monday - ZM, NDSN, FN, LU, QFIN
Tuesday - BHP, LOW, MDT, BIDU, DKS
Wednesday - NVDA, ADI, SNOW, ADSK, SPLK
Thursday- INTU, RY, TD, NTES, WDAY
Friday - SATX, TLK, EBR, UI, AVAL
Client Focused Trading® for large institutions, pensions, hedge funds, wealthy families, and private equity for over 30 years.
Glen Eagle Wealth, LLC is a member FINRA and SIPC
This desk commentary is for informational purposes only
