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Buy immersion in gold, but not in stocks, say global strategists at Citi

It was a rough September for the stock market with the S&P 500 SPX,
+ 0.29%
decline over 7% so far.

Overall, Citi’s global asset allocation team does not expect sailing to become easier as it fears the upcoming US election. “A political process that cannot pinpoint its leader, parties that refuse to accept results and potential social disruption, all damage trust and reduce investor confidence, especially in light of everything else that is happening in the background. The challenge of the rule of law would lead to a reassessment of historically “safe” US assets (including the US Treasury and the US dollar), albeit only temporarily, strategists say.

The next phase of the COVID-1

9-related incentive is likely to fall victim to a vacant Supreme Court position, the strategies add (more on that below). As the Northern Hemisphere enters the colder autumn, the number of cases that can both change human behavior and government reactions is increasing, and both can weigh on economic activity.

The Citi team acknowledges that “the release of the central bank remains inextricably linked to the stock market” and that there will be more purchases of government bonds and loans and a desire to keep inflation-adjusted interest rates well below 1%.

Against this background, the Citi team says that “it makes sense to reduce some specific risks to a developed market at a time when short-term probabilities are distorted to some regional [economic surprises] it is once again becoming a European-led negative. “The Council recommends a rotation of European EEM shares in emerging markets,
where he was overweight for the first time since the COVID-19 crisis. Basics for the DXY dollar,
+ 0.23%
will remain unsustainable in the medium term, which will be another positive for emerging market stocks, strategists added.

They buy immersion in gold GCZ20,
with a target of $ 2,200, due to increased macroeconomic uncertainty, which “is likely to push investors back to alternative money-saving assets.”

The buzzing

He seems dead, again talking about a new stimulus package for the United States after Democrats in the House of Parliament began drafting a new $ 2.4 trillion stimulus bill, up from $ 3 trillion before. Parliament Speaker Nancy Pelosi said “we will hope to be at the table with them soon”, while Finance Minister Stephen Mnuchin said the two sides had agreed to continue talks.

New York Federal Reserve President John Williams concludes a week of Fedspeak with a speech. Also from an economic point of view, data on durable goods orders for August are due, with expectations of a moderate increase after a jump of 11% in July.

COSTCO COST wholesale,
+ 0.68%
Late Thursday, fiscal revenue forecasts for the fourth quarter of sales in the same store, excluding the change in gasoline and currency, beat 14%. Chief Financial Officer Richard Galanti has not pledged to use about $ 30 a share in cash and cash equivalents or dividends, except to say the board will consider it at the next meeting. He also said the retailer would continue to pay workers an additional $ 2 an hour for at least the first eight weeks of the first quarter.

The European Union is appealing against a tax decision in favor of Apple AAPL,
+ 1.02%,,
which keeps about $ 17 billion of the technology giant’s money deposited.

FTSE Russell says Chinese government bonds will be included in the global government bond index next year, another step toward China’s integration into global financial markets. Analysts at Deutsche Bank estimate that this move will bring $ 120 billion in inflows by September 2022.

The market

After the session back and forth on Thursday. US futures for ES00 shares,

fell once more. The dollar rose and gold fell.

The diagram

UBS tried to break what lifted the S&P 500 this year, starting on April 10, when mobility bottomed out. Their analysts conclude that the biggest driver is the increase in liquidity, which they believe has achieved a high result in the last month. Improving mobility and hope for vaccines have also helped, while increased uncertainty is slowing. Their strategists recommend a rotation spell of one to three months from the United States, especially in emerging markets stocks.

The tweet

Now this is a letter of termination and waiver.

Random readings

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Crows, to the surprise of scientists, have consciousness.

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