In the latest edition of our monthly report:
Editorial
The US presidential election show
The media frenzy;
How much does it cost? ; and
What does it change?.
What consequences can we expect for the markets?
The market has already positioned itself for a Donald Trump victory and partly for a Republican victory in the Senate. Fears of even greater fiscal slippage in this scenario have already impacted the cost of US debt.
- by Kim Muller, our CIO
Assessment of the economic situation
Economic data from the US remain solid, while inflation reaches a cycle low. The Chinese economy is no longer slowing down, if not restarting, while commodities prices are weakening.
US service sector remains robust;
Oil gives back some purchasing power; and
China continues to cut benchmark rates.
What about the SNB's monetary policy?
The Swiss National Bank (SNB) has just announced a 9-month profit of CHF 62.5 billion, which is hardly a surprise given the strong performance of the markets, particularly in the US, and of gold. This compares with 1.7 billion francs in the first three quarters of last year. Taking advantage of the press release, the Central Bank repeated its readiness to intervene in the currency markets if necessary. In our opinion, translate it into a level of 0.93 against the Euro.
Financial markets during the month
US equities outperform again in October, a difficult month for all indices. Treasury yields up sharply, while the price of gold continues to set historical records.
US equities, again and again;
The curve is finally emerging from its period of inversion; and
Emerging central banks “thirsty” for gold.
Our convictions
Comments on investment decisions
The markets' historic seasonality undermined. October was supposed to be a favourable month for equities, but this year the markets suffered, weighed down by the sharp rise in bond yields. Gold continues to break records, while energy prices hit annual lows, despite the geopolitical situation.
Equities;
Bonds;
Precious metals, listed real estate (REIT); and
Currencies.
Performance summary
Equity performances; and
Performance of bonds, currencies and commodities
Disclaimer
This document has been prepared using sources believed to be reliable but should not be assumed to be accurate or complete. The statements and opinions it incorporates were formed after careful consideration and may be subject to change without notice. The author and distributors of this document expressly disclaim any and all liability for inaccuracies it may contain and shall not be held liable for any damage that may result from any use of the information presented herein. Past performance is not indicative of future results. Values of an investment may fall as well as rise. This document is intended for information purposes only and should not be construed as a recommendation, an offer or the solicitation of an offer to buy or sell any investment products or services. The use of any information contained in this document shall be at the sole discretion and risk of the user. Prior to making any investment or financial decisions, an investor should seek individualised advice from his/her financial, legal and tax advisors that consider all of the particular facts and circumstances of an investor's own situation.
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