Let's take a quick look at the charts and see what changed over the past month.

Let's start by looking at interest rates. Bond yields rose across the board for all maturities and for all risk levels.

With rising yields, bond prices tumbled while stocks rose, leading the Stocks to Bonds Ratio higher.

Inflation declined along with the money supply growth rate. Since March 2022, the M2 money stock, a measure for the amount of US dollars in circulation, has been declining slightly from it's elevated level - after it grew by over 26% in 2021 following the reaction to the Covid 19 recession.

The real interest rate for a 1-year US Treasury bond rose from -7.39% to -2.97% (calculated using actual rather than expected inflation). The price of Gold rose despite rising real yields.

Silver rose faster than gold, leading the Gold to Silver Ratio lower, while opening up a gap between the ratio and the US dollar index.

With short-term rate rising faster than long-term rates, the Yield Curve kept inverting and yield spreads went further negative. For the first time in this business cycle the often cited 10y-3m spread turned negative too.

Credit Spreads remain low except for mortgages, for which they recently exceeded the 2008 and 2020 highs.

Let's take a look at different valuation metrics for the US stock market. The PE Ratio for the S&P 500 dropped to 20.06, thus moving closer to its long-term mean average. The Shiller PE Ratio dropped to 28.37, Market Cap to GDP to 147.98%, and the Dividend Yield rose to 1.69%.

Internationally, the US stock market kept outperforming the (aggregate) rest of the world. Emerging Markets kept underperforming Developed Markets and were being led lower particularly by Chinese stocks.

Commodity prices (as measured by the PPI, Producer Price Index) peaked in May this year and have been falling since. Examining in more detail, this trend can be confirmed by looking at different categories, such as Fibres and Textiles, Precious Metals, and Grains.

Segmenting the US stock market, the Nasdaq kept underperforming the S&P 500. The Small-cap to Large-cap Ratio has been rather stable over the past year and opened up a gap to the 10-Year (expected) Inflation Rate.

Looking at different US stock market sectors, Energy, Basic Materials, Industrials and Financials outperformed the overall market while Consumer Discretionary underperformed. The worst performing sector over the last 3 years is Communication Services, which includes Meta (Facebook), Alphabet (Google), and Netflix.

Finally, looking at crypto, both Ether and Bitcoin are down over 70% year-over-year. The two cryptocurrencies took another hit last week, after FTX, a large crypto exchange, filed for bankruptcy. In the aftermath of this debacle, calls for regulation of the industry are getting louder.

This month's newsletter is sponsored by Green Crypto Research. Green Crypto Research (GCR) is a non-profit association based in Zug, Switzerland, that specializes in evaluating the sustainability of cryptocurrencies. The organization was founded in May 2021 and developed the world's first and to date only ESG rating for cryptocurrencies. With that, GCR enables professional investors, asset managers and crypto exchanges to offer sustainable crypto solutions to their clients.

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