Webinar: The most critical juncture since 2009
Head of Equity Strategy
Summary: Join Saxo Head of Equity Strategy Peter Garnry as he explains why equities now face their most decisive time in a decade, following severe volatility at the end of 2018, a tremendous policy U-turn by the Fed and a heady and prolonged rally so far this year.
Q2 earnings were worse than expected but investors are pricing a ‘new world’
Earnings were bad in Q2 and worse than expected six weeks ago although the provided outlooks have improved and bolstered forward earnings expectations. It is clear from dividend futures that the market expect companies to rebound in terms of earnings but lower the payout ratio to either repay debt or invest in growth. Either way, our view is that investors have overlooked bad macro and earnings as they are pricing in a 'new world' of lower yields for longer but still high growth in certain areas of the economy which will drive bond proxy pricing in equities and accelerate equity concentration.
Gold & everything is correlated to one
We see small signs of top being established: the two driving forces - lower real rates and the expansion of Fed's balance sheet - are both having engine failures.
Podcast: New S&P 500 all-time high in sight while gold tumbles
Equities are grinding higher today with a new all-time high in the S&P 500 in sight. The real action continues in gold which dipped below 2,000 earlier as real yields continue to climb a bit and traders book profits following the three-week surge. Oil continues to be range bound ahead of monthly oil market reports. Vestas' Q2 earnings this morning showing strong revenue generation and FY20 revenue guidance significantly above market expectations.
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