In the latest edition of our monthly report:
Editorial
Sell the downtrend and buy the uptrend
Chinese authorities finally listen to the market;
Chinese equities virtually absent from the global index; and
Chinese shares “buyable” again?.
What consequences can we expect for the markets?
The trigger we've been waiting for to pull the market out of its negative spiral has arrived. Those who persist in denying China's importance in the financial markets will regret it over the coming months, and it would be a mistake to stay away.
- by Kim Muller, our CIO
Assessment of the economic situation
The Federal Reserve finally begins its rate-cutting cycle with a 0.50% cut. It clarifies its rate expectations for 2024 and 2025, but the market is still expecting deeper cuts. Europe remains stalled.
US economic slowdown may be coming to an end;
Oil does not (yet) believe in China's rebound; and
For China, it was urgent to act vigorously.
What about the SNB's monetary policy?
After 12 years of loyal service, Thomas Jordan is stepping down as Chairman of the SNB with a further 0.25% rate cut. A master in the art of surprising the markets, he did not attempt to pull off a final surprise by cutting rates by 0.5%. It's true that part of the market had included this possibility, and the surprise, in this case, would not have been sufficient to be totally effective. See you in December with his successor, Mr. Martin Schlegel, for another
cut!
Financial markets during the month
Chinese equities are soaring, while the majority of investors are absent from this market. The European market benefits from this rebound, while bond yields rise slightly. New record for gold.
Chinese equities to overtake US in 2024;
The curve is finally emerging from its period of inversion; and
Gold far more precious than platinum.
Comments on investment decisions
Contrary to historically unfavourable seasonality, September proved to be a positive month, with Chinese equities performing remarkably well. Gold continued to break records, as the Fed finally began its rate-cutting cycle. Tensions in the Middle East escalate further.
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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