If you don't want to read the report...below is a short summary

1. the US labor market and the risk of recession

The US economy is in a precarious phase. The S&P 500 has fallen below its 200-day line for the first time since October 2023. Even more critical is the price ratio of the S&P 500 to US Treasuries ($TLT)which is once again at the 200DMA line, essentially a support level that has served as a psychological barrier against a bear market since December 2020 (Chart 2). The most recent Februar-Payroll-Daten with 151k new jobs was right in the middle of nowhere. A jobs report of over 200k would have been a strong reading and would have indicated that the US economy is robust enough to withstand higher interest rates. Stock markets would have stabilized as there was no imminent threat of recession; a report of 125k would have been a weak reading and would have indicated a cooling economy and falling corporate profits. The market would have slipped into a bear market phase, while bonds would have benefited as a safe haven.151k jobs lie exactly between these thresholds and offer no clear basis for interpretation.

Another alarming signal comes from the ratio of US consumer discretionary stocks to Staples stockswhich has reached an all-time high (Chart 5). For decades, this ratio has been a reliable early indicator of an imminent weak phase for the S&P 500. You could say that the USA is one payroll report away from a recession. The background to this is the dwindling influence of government job subsidies: In January 2025, the following 70% des Arbeitsmarktwachstums came from the public sector, a significant decline from 85% in the previous year. At the same time, the household savings rate is rising.

2 Global military spending: Europe in a fiscal dilemma

Germany's military expenditure amounts to only 7% of US spending, the United Kingdom reaches 8% (Charts 6 and 7). This explains why European budget deficits are exploding: For Germany, an average deficit of -4% of GDP is forecast for Germany for the period 2025-2030 (Chart 9). The "Whatever-it-takes" policy on Merz is driving the yields of German Bundesanleihen to over 3% (15-year high) and British Gilts to over 5,5% (27-year high).

German Bund yields could overtake US Treasuries this year (Chart 3).

3. flight to safety, exodus at risk

• $965515 (-3,39%) recorded the largest 4-week inflow of all time (USD 9.9 bn, chart 12). Gold is seen as a safe haven as investors seek hedges in the face of geopolitical uncertainty and looming recessions.

• Crypto funds experienced a record outflow of USD 3.6 billion (Chart 13), the largest since records began. Volatility in Bitcoin and Ethereum and regulatory concerns are deterring institutional investors.

• Infrastructure funds recorded the largest outflow of all time (USD 0.9 bn, Chart 15) as rising interest rates weigh on the valuation of long-term projects.

• European equities saw the strongest 4-week inflow since August 2015 (USD 12 bn, chart 14). The drivers are the relatively low valuations and the focus on European industrial companies and banks.

• Emerging markets saw the largest inflow in three months (USD 2.4 bn), supported by China's tech revival and India's reform momentum.

• TIPS saw an 8-week inflow streak, the longest since December 2021, as investors want to be prepared for potential stagflation.

4 AI shock and tech

The DeepSeek AI shock has rearranged the tech bubble. The Magnificent 7 ($AAPL (-6,25%) , $MSFT (-2,62%) , $NVDA (-6,05%) , $AMZN (-6,32%) , $GOOGL (-3,55%) , $META (-7,03%) ) lost 3 trillion USD in market capitalization and are now known as the Lagnificent 7 are mocked. At the same time, the market capitalization of China's BATX ($9888 (-3,13%) , $9988 (-2,08%) , $700 (-1,49%) , $1810 (+5,18%)) to 1.6 trillion USDa sign that Chinese companies are catching up in the AI sector.

This shift is also reflected in the US-ISM-Manufacturing-PMI-Daten (Charts 10 & 11): The recent rise to 55 points is seen as tariff frontrunning interpreted. Companies stocked up their inventories ahead of time in order to circumvent expected trade barriers (e.g. new US tariffs on Chinese semiconductors). However, this short-term upswing masks structural weaknesses: The cyclicals vs. defensives ratio (Chart 11) points to an imminent slowdown in industrial activity. The cyclicals vs. defensives ratio compares the performance of cyclical stocks (industrials, commodities, consumer goods) with that of defensive stocks (utilities, healthcare, consumer staples). Basically serves as a leading indicator for economic expectations.

5. forecasts 2025: strategic decisions

Recommendation: Buy 30YUST with a yield target of below 4%. Reasons:

• The US government is ending its 5-year phase of excessive spending, leading to a decline in demand.
• 70% of job growth in January 2025 came from the public sector, a sign of private sector weakness.

At the same time, one can UK Gilts & EU bonds can be classified as sell candidates. The yields of UK gilts are at 5,5% (27-year high), driven by the cost of rearmament and a budget deficit of 6.1% of GDP.

Equities: Europe and China in focus

• European markets: The DAX (+18% YTD) and the Euro Stoxx 50 (+13% YTD) are benefiting from undervalued industrial companies and banks. Despite a net outflow of USD 255 bn since 2022 flowed for the first time in the last 4 weeks 4 bn USD returned for the first time, a good sign.

• China: H-shares (+23% YTD) are attracting capital as Chinese tech companies benefit from the AI revolution and government subsidies.

• India: Small caps are 21% below their September 2024 high (Chart 4), but offer long-term opportunities in the context of the Make in India Initiative

Weak dollar, strong exporters

A weak US dollar favors European and Chinese exporters. At the same time US semiconductors could experience a recovery: The equal-weighted Semiconductor Index($esox) has 73% of its gains since the ChatGPT hype in May 2023. The tech sector also saw an inflow for the first time in 5 weeks (USD 2.6bn).

6. trouble spots: Japan and the ticking debt bomb

The 30-jährigen JGB-Renditen are quoted at 2,5% (17-year high), while the Bank of Japan with a key interest rate of 0,5% well behind the wage growth (5-6%) is lagging behind wage growth. Should the BoJ tighten its policy in order to regain credibility, there is a risk of a Nikkei Sell Offsimilar to the in August 2024when the yen appreciated sharply and Carry-Trades collapsed. If it fails to act, the weakness of the yen could push up import costs further and exacerbate stagflation.

7. summary 2025

2025 will be dominated by three megatrends:

• Long-dated US Treasuries and gold serve as protection against recession and stagflation.
• Europe and China take advantage of the weakness of the US dollar and technological upheavals.
• Japan's debt crisis, Europe's fiscal overheating and the fragility of the US labor market.

• Buy: European industrial stocks ($SIE (-7,31%) , $ASML (-7,68%) ), China's BATX, 30-year US Treasuries, gold.
• Dont's: UK/EU bonds, crypto, infrastructure funds.
• Wacth: BoJ policy, US payroll data, Indo-Pacific geopolitics.

Broaden your portfolio to reduce risk? Tradingview Indicator

Who hasn't experienced this? You think you're diversifying with a new asset, only to realize that it's actually very similar to the rest of your portfolio. This doesn't create a real diversification effect, it's just packaged differently and you have almost the same exposure.

This is where my indicator comes in. It shows you how strongly your current chart (you can use just about anything here: from individual stocks like $PLTR (-1,3%) to ETFs like $IWDA (-3,86%) , bonds, crypto, commodities, economic data, etc.) with key markets such as the S&P500 $VUSA (-4,42%) , the Nasdaq $CSNDX (-4,01%) , the Russell2000 $XRS2 (-5,45%) , the Dax $LYY7 (-1,56%) , China $CNUA (-3,2%) , gold $GOLD silver $PHAG (-8,41%) , bonds or the cryptocurrency $BTC (-0,47%) correlated. This allows you to immediately recognize whether a supposed addition to the portfolio actually changes anything or is basically just a clone of what you already have. Let's take an example: You think you are creating a counterweight to Europe with China, but you realize from the correlation that both markets are moving almost in sync. So you know that this "diversification" is of little use. Apart from the fact that Europe and China generally haven't done much for a long time, haha.

The interpretation of the values is relatively simple. High correlations (close to 1) indicate similar price trends, negative ones indicate opposing trends, and values around zero indicate that there is no clear connection. Bear in mind, however, that correlation is not the same as causality and often only shows indirect relationships. Moreover, historical correlation is no guarantee of future patterns. Nevertheless, this view helps to uncover possible misconceptions and develop more targeted diversification strategies to make your portfolio more resilient. The +/- ratio can now also be taken into account. This is because it often happens that one and the same asset correlates very differently with each other in different phases - sometimes very positively, sometimes very negatively. As a result, the average value can provide a misleading picture. The stronger these fluctuations are, the more percent of the time it is positively or negatively correlated. This is therefore an additional indicator to check how meaningful the average correlation actually is. So + value is the time where the correlation is positive in % etc.

Still to be optimized, that the correlation is not currently limited to certain time periods. For example, if you want to look at the relationship between MicroStrategy $MSTR (-5,36%) and Bitcoin in isolation would have to exclude earlier phases in which MicroStrategy was still a real business and not a "leveraged closed commodity fund" as it is now. In addition to the ATH delta filter, I also plan to incorporate a moving average (MA) as a further trend filter. In the long term, I would like to integrate even more markets, for example emerging markets or non-USD bonds, in order to paint a truly comprehensive picture.

The correlation with interest rate expectations I have used $SHY (short-term government bonds) and $TLT (long-term government bonds). If the SHY falls, the market assumes that interest rates will rise over the next two years. In the case of TLT, this expectation relates to around 16 years and is effectively "leveraged" by the term. If the asset you have shows a high correlation to the SHY, it means that it is relatively sensitive to interest rates (like almost everything). But that would be too much to explain in detail. What is clear, however, is that interest rates play a major role for equities, especially for the Russell 2000, where many smaller, unprofitable companies benefit from low interest rates, as do mining companies with high levels of debt, for example. Of course, it is not the only correlation, but it is an important factor.

• Which other markets or assets would you include to bring more clarity to your analysis?
• Does the indicator even make sense?
• And is there anyone here with a statistical background who would like to go through the code to make sure that everything is calculated correctly or how it could be done better?

I don't know if this is an affiliate link, but don't think so anyway: this is advertising

https://www.tradingview.com/script/kRCxLnhY-Asset-Correlation-Check/

Why is the market not afraid of the Powell speech?

Sure, the inflation data came in pretty much in line with expectations, maybe a tad above. But I see Powell being rhetorically hawkish today. The "red wave" has sparked a lot of euphoria, and Trump may make the Fed more restrictive than under Harris. Asset inflation has been quite high this year, which should now slowly (with a delay of 6-18 months) feed through to core inflation. The betting markets currently see an 82% probability of a rate cut in December - but wouldn't today be an opportunity for Powell to slowly steer the market towards caution?

What's your take on this, is this really relevant at all at the moment or am I completely wrong?

$TSLA (-3,59%)
$MC (-4,95%)
$NVDA (-6,05%)
$ASML (-7,68%)
$PLTR (-1,3%)
$BTC (-0,47%)
$ETH (-1,84%)
$VIX
$SPY (-6,37%)
$TLT
$TIP (-0,93%)

Good day.

I am now publishing my portfolio for the second time, a few things have changed. I am 19 years old and started investing in October last year. I was a student until july this year and have been working since august. That's why I can invest 500 per month. From January I have to go into the military, from then on I will earn correspondingly less for the first 124 days, the remaining 176 days it will be gross about as much as now net. I'll see how much I can invest during this time. I sold my core position $VWRL (-4,28%) I have sold in order to shift the money into the $TLT to shift the money into the The idea behind this is that if interest rates fall with a recession, I will still make a profit. The overall loss is actually higher than with getquin due to many mistakes made by beginners such as selling small bad investments with too high fees.

I look forward to your assessment and opinion on my portfolio.

Have a good trading day

Good morning (-:

I would like to start a discussion about the $TLT because I don't think I have understood the principle behind it yet. In simple terms: this is an ETF which invests in a part of the 20 year government bonds of the USA.

A few assumptions:

• if the interest rate continues to rise in the USA, will the price of the ETF fall because the "old government bonds" are not as attractive as the new ones?
• what happens if the interest rate stays the same, the price should not fluctuate much, except when the stock market weakens and bonds become more attractive?
• if the interest rate goes down, the price should go up because the old bonds have a better yield than the new ones? Equally, however, stocks become more attractive again and compete?
• the ETF itself has a payout rate of currently between 3-4%, when is that paid out (semi-annually, in January?) - does the price then fall accordingly - the chart does not look that way

Looking forward to the discussion.

Kind regards