This morning, I had a call with one of my team of partners based in different locations. We kicked things off with all the enthusiasm of a coffee-fueled brainstorming session, diving into discussions on multiple topics. We navigated through the myriad signals from our TM-IM model, poring over dozens of charts.
Oddly enough, the typical seasonal weakness is on vacation this year. Remember the growth scare and the big yen carry trade unwind that rattled the markets? How about the aftershock in early September that surprised almost everyone? No? Risk assets do not remember either.
Yeah, institutional investors are being nudged into the market driven by the fear of one thing worse than volatility, seriously underperforming their benchmarks. We do not want to be party poopers here. Have fun but do not be surprised if we see pullbacks of up to 10% until the presidential election is a distant memory. if you are a permabear, feel free to call it a “crash” if it makes you feel better.

One partner who is currently in Dubai pointed out that with the global rate-cutting cycle now underway, the allure of cash is fading fast. As global stimulus lifts the prospects for risk assets, it is time for investors to focus on making some smart moves.
Speaking of smart moves, many investors have been scratching their heads over gold’s performance in recent years. Last year, we turned more bullish on gold, and let us just say nobody is complaining about that decision these days.
A partner who just got back from a working trip to the US reminded us that the yellow metal has climbed over the months, boasting a shiny +25% increase so far this year. Remember, our allocation to gold is not a one-size-fits-all and do not just look at the returns.

Another partner based in Hong Kong talked about oil prices and energy equities. It has been a rollercoaster year for this sector. Energy was pretty sleepy but suddenly geopolitics have turned it into the star of the show. She favors a tailored approach instead of a generic broad energy allocation.

Nobody should forget about China and well, people are turning more bullish on the Chinese economy. With the magnitude of fiscal measures being sizeable and policymakers aiming to rejuvenate the property sector, prospects for China’s economy are likely to improve, in my view. The property market needs to find a bottom.

As for the US presidential election, we are not joking around here. It is still too close to call. None of my partners is exactly rolling out the welcome mat for a Trump return to the White House. Hip, hip, hooray! I believe Wall Street will be voting for Trump.
