Hard to get “too worried” about Europe (e.g. the German double dip, with GDP printing two consecutive quarters of negative growth, and thus meeting that older definition of a “technical recession”) given the services data.

Big jaws, and yes whilst manufacturing downturns are often a harbinger for something worse, we should note that we are still normalising some of the COVID/energy/supply-chain-bullwhip conditions, which absolutely muddy the waters, and also cause large sectoral reallocations (e.g. from goods, to experiences, which falls into the services category) so probably not too terrifying just yet.

The more normal reasons of “do equities look good given cash rates” and some signs of froth stemming from NVDA FOMO (fear of missing out) are better candidates for asset allocation, I think, including the narrowness of market leadership.

All of the gains, are coming from a relative handful of winners. The below graph plots the % of companies beating the index, and shows that the concentration is on par with just prior to the tech wreck, when enthusiasm for the internet meant a handful of giants (some of them, the same ones as today) powered the index to what ultimately proved as “unsustainable highs”.

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