Charts of the Week - Mega-caps rally, a global growth rebound, and mild inflation in the Gulf
This week’s charts cover the following data:
The post-FAANG mega-caps are driving the US stock rally
The biggest stocks are leading this year’s stock rally.
Our visualisation breaks down the year-to-date gain by the S&P 500, showing how the 10 biggest names by market value are overwhelmingly responsible for the rally – especially since March, when bank failures dented confidence in much of the rest of the equity space.
Most of these names are in Big Tech, evoking the “FAANG” surge that drove the 2010s. (That’s Facebook, Amazon, Apple, Netflix and Google – before a few name changes made that acronym obsolete.)
Today, the top 10 are Apple, Microsoft, Amazon, Nvidia, Alphabet (counting both stock classes as a single company), Berkshire Hathaway, Meta, UnitedHealth, ExxonMobil and Tesla.?
The great global growth surprise of 2023
One of the positive surprises for 2023 is how resilient global growth has been, despite a record monetary tightening cycle. (China’s reopening likely has something to do with it.)
This chart uses measures of the purchasing managers index (PMI), which surveys executives about prevailing trends in their industry, to track the outlook in nations around the world. Readings below 50 indicate contraction.
It seemed that we were headed towards a broad recession in the second half of last year. But PMI is back above 50 for most economies.
Inflation in Gulf nations has been no big deal – and sometimes nonexistent
Tip:?register here?for our May 16 webinar on Saudi Arabia and the MENA region.
There’s a place in the world where inflation has not been particularly rampant over the past year: the oil-producing nations of the Gulf Cooperation Council (GCC).
As our chart shows, annualised inflation is running at about 3.3 percent for the GCC as a whole, much slower than the rate in the US and eurozone. The year-on-year comparisons are enlightening, as well. While Saudi inflation has picked up, Oman and Kuwait have experienced disinflation since January 2022; Bahrain is in outright deflation.
Five of the six GCC economies peg their currencies to the dollar, which can help keep inflation in check. Governments have also tended to use their oil wealth to proactively manage food and energy prices using subsidies.
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Interestingly, booming Dubai, whose role as a global hub makes its economy quite different from the rest of the region, is experiencing the steepest pickup in inflation.
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Register for our May 16 webinar: Unlocking the secrets of Saudi Arabia’s economic boom
Our expert panel will comprehensively explore the macro view of the region and Saudi Arabia's fiscal and economic trends. This is a great opportunity to gain a deeper understanding of the Saudi Vision 2030 strategic diversification plan and its impact on the wider MENA region.
(The timing will be very early in the morning for participants in New York, but we still encourage listeners to register as we will send you a replay.)
Credit is still expanding in the US, but conditions are getting tighter
Amy Cutts, chief economist of the National Association of Credit Management, delves into a survey showing that ripples from the US banking crisis are spreading into the wider economy.
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