Investment Committee July 2020
These are key points discussed in our monthly investment committee meeting:The teams’ consensus for the month is we remain neutral with a long bias on equities.
Flows continue to be more important as market drivers than fundamentals and news, as the gap between the Wall Street and the ‘main street’ widens.Our view is that precious metals could continue to shine in a negative yield world. We remain positive on Gold, Silver & Copper.
2020 vs 1929: Similarities and differences
History has shown that every financial crisis is different from previous ones, in aspects of conditions, catalysts and market response. However, the 2020 stock market environment strongly resembles the 1929 market with equities rallying, further widening the gap between fundamentals and the valuations, while the real-economy weakens.
In this post we explore six similarities and three diferences between 1929 and 2020. We leave you to make your own judgement.
In this post the key points from our monthly investment committee meeting are discussed.
We are witnessing a liquidity driven market consequently of the limitless ‘bazooka’ stimulus packages unveiled by the Fed and the ECB.
Corporate America is still able to borrow cheap (rates kept low due to the virus and lockdowns).
Valuations are clearly extreme, however, this was also true at the S&P ~2700 levels and it would not be surprising if they continue to be more and more extreme and overvalued.
What happened last week: In the US, Stocks recorded a second consecutive week of solid positive returns, with value stocks again gaining ground against highly valued growth shares. At its peak Thursday, the S&P 500 Index moved within 10% of its all-time high, pulling it out of correction territory, according to some definitions. Meanwhile, the tech-heavy Nasdaq climbed within almost 3% of its February peak before falling back. Utilities outperformed, while energy stocks moved lower on reports of an increase in domestic crude inventories.Read More →