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

Let's start by looking at the Yield Curve, which is the most inverted it has ever been since 1981.

Looking more closely, we can see that yields rose for all maturities until November 2022. As Charlie Bilello points out, since then, long-term yields started falling because investors are expecting inflation and growth to calm down next year. Furthermore, when short-term rates are higher than long-term rates (when the yield curve is inverted), it usually means that investors expect the FED to cut (short-term) rates. Short-term rates fall when economic growth is weak, which is why an inverted curve is associated with recessions.

Credit spreads for mortgages are also the highest that they've ever been since 1982. They're even higher than they were during the housing bubble of 2008.

Higher yields for mortgages have had an impact on US Home Prices. They fell relative to the CPI and relative to income.

Commodities as measured by the Producer Price Index also declined. Looking at the asset class in more detail we can see that Commodity Prices normalized, including for Natural Gas, for Base Metals, for Grains, and for Fibres & Textiles.

Let's take a look at inflation, which dropped along with the Money Supply Growth Rate, which is close to turning negative for the first time since 1933.

Falling inflation led to rising real yields, which are still deeply negative at -3.04% for a 1-year US Treasury bond (calculated using actual rather than expected inflation).

Let's take a look at the US stock market. Since October 10th, stocks bounced back.

Gold and Silver also recovered with Silver rising faster than Gold, leading the Gold/Silver Ratio lower along with the US Dollar Index. 

Looking at different valuation metrics for the US stock market, the PE Ratio for the S&P 500 rose to 21.13, the Shiller PE Ratio to 29.73, Market Cap to GDP to 154.76%, and the Dividend Yield fell to 1.61%.

Segmenting the US stock market, growth stocks kept underperforming value stocks and the the Nasdaq kept underperforming the S&P 500.

Looking at a comparison of national stock markets, the Turkish BIST stands out with an exceptional +85.72% year-to-date performance in USD terms in 2022. Looking at a 3 year time frame, Argentina and India stand out with +65% and +33% respectively. During the same time frame US stocks rose by +25 percent.

Following last month's FTX debacle that shook up the crypto scene, Bitcoin and Ether have been consolidating at lower levels.

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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Thanks for reading and have a nice day!