top of page
Search
  • Marc Bentin

The Fear of Consensus?

BentinPartner Weekly



Dear Reader,


Last week may just have been one of these bumps on the road of an everlasting growth stocks outperformance. If it was not, value stocks may only outperform within the context of a bear market (which will complicate matters), given the dominating position of tech stocks in US indices. Dollar bulls got some reprieve, on “risk off” dollar reflex purchases (as ECB President C. Lagarde also took a page from M. Draghi’s script, talking down the Euro after the ECB Council last Thursday, promising more easing December).


The transition away from the dollar will remain a key concern that the digital CNY (severed from Swift) and similar other central banks digital initiatives may only exacerbate. A crisis often happens slowly, then all at once. The lesson of history is also that people most often ignore them.


Precious metals dropped for the week as well although bitcoin, silver and gold (in that order) shined again towards the end of the week.

Over the past week, the S&P500 sold off by -5,6% (1,5% YTD, Z-score -2,1) while the Nasdaq100 sold off by -5,4% (26,7% YTD, Z-score -2,1). The US small cap index sold off by -6,1% (-7,6% YTD, Z-score -2,1).


Most Gafas and new tech themes that raked in the biggest year to date gains so far, got crushed last week ...


Some fund managers grew more concerned by fears of a “consensus” developing in Washington to tighten regulations, and prospects that another large stimulus bill would bolster a rotation out of tech and into other sectors, including economically sensitive value stocks. Both Trump and Biden criticized large tech companies although they fell short of explicitly calling for them to be broken up. Trump has said “there is something going on in terms of monopoly” when asked about big tech firms...


Cboe Volatility Index rallied 38,0% (175,9% YTD) to 38,02.


The Eurostoxx50 sold off by -7,4% (-19,0%, Z-score -2,1), underperforming the S&P500 by -1,9%.

Diversified EM equities (VWO) sold off by -3,4% (-1,5%), outperforming the S&P500 by 2,1%.

The Dollar DXY Index (UUP) measuring the USD performance vs. other G7 currencies gained 1,3% (-2,3%) while the MSCI EM currency index (measuring the performance of EM currencies vs. the USD) dropped -0,5% (-0,6%). As the FT wrote “...the US dollar has found its footing, reflecting its haven status whenever equities and investor sentiment take a knock.


But that may prove fleeting given the longer-term forces stacking up against the world’s reserve currency.” We certainly share those concerns.

10Y US Treasuries dropped 3bps (-104bps, Z-score 2,2) to 0,87%. 10Y Bunds dropped -5bps (-44bps) to -0,63%. 10Y Italian BTPs climbed 0bps (-65bps) to 0,76%, underperforming Bunds by 6bps.


US High Yield (HY) Average Spread over Treasuries climbed 41bps (173bps) to 5,09%. US Investment Grade Average OAS climbed 4bps (34bps) to 1,35%.


In European credit markets, EUR 5Y Senior Financial Spread climbed 12bps (33bps, Z-score 2,3) to 0,84%.

Gold dropped -1,2% (23,8%) while Silver sold off by -3,9% (32,5%). Major Gold Mines (GDX) sold off by -3,4% (28,0%).

Goldman Sachs Commodity Index sold off by -5,0% (-31,6%, Z-score -2,4). WTI Crude sold off by -10,2% (-41,4%, Z-score -2,5).

Over the week end…

Ø Stock futures started weak overnight as oil declined 4.4% amidst fears of a slowing global economy (as the US reported 99,321 new Covid-19 cases on Friday, beating its previous record from a day prior) and as Libya continued to ramp up crude production after a truce in its civil war. Choppy trading will likely continue as traders brace for Tuesday’s US presidential election. This morning’s equity session was saved by better than expected Chinese growth data.

Ø EU and British Brexit negotiators will continue talks on Monday until mid-week to avoid a damaging breakdown in trade in less than nine weeks.

Ø French President E. Macron said that France’s wish was that things “calm down” but for this to happen, it was essential that the “Turkish president respects France, respects the European Union, respects its values, does not tell lies and does not utter insults”.

Ø Morgan Stanley estimated that we will simply have to watch Florida and South Carolina to determine who won the elections on Tuesday night as the difference will come from the mailed-in votes and both states have already processed the majority of those while other states have been slower processing.


Have a nice week ahead and stay safe.

 

For a Timely receipt of this report and daily updates and to access our intra-day Alert system, join the BentinPartner Daily Free Trial List. You won't regret it.

 

Marc Bentin, BentinPartner GmbH

Founder, Chief Investment Officer

BentinPartner GmbH is a Swiss registered independent financial adviser.

We deliver transparent, professional, tailor-made, and competitive portfolio management services. We help our clients build and manage their wealth, resting on the three pillars of our business values; integrity, competence, and responsibility.


For more information about our portfolio management services, check our Beliefs and FAQ’s.


Our premium research blends macro economic, political, monetary and technical analyses to produce an actionable 360 degrees daily review of Global Financial Markets on a daily basis.

If you like our Weekly, you will love our Daily. Take a free trial to the BentinPartner Daily or visit our web site http://BentinPartners.ch

Bentinpartner GmbH is Advisor to the Phi Funds AIF, an umbrella Alternative Investment Fund registered and regulated in Lichtenstein, specialized in the management of Funds focused on physical precious metals.

 

Important Disclaimer

© Copyright by BentinPartner llc. This communication is provided for information purposes only and for the recipient's sole use. Please do not forward it without prior authorization. It is not intended as a recommendation, an offer or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon and particular needs. This report does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation or particular needs of any person who receives this report. Accordingly, the opinions discussed in this Report may not be suitable for all investors. You should not consider any of the content in this report as legal, tax or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner llc, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner llc. The content and views expressed in this report represents the opinions of Marc Bentin and should not be construed as guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner llc believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. This Report is also not intended to be a complete statement or summary of the industries, markets or developments referred to in the Report.

#fx #forex #investing #markets #riskmanagement #bankingindustry #finances #money #traders #quants



21 views0 comments

Recent Posts

See All
bottom of page