U.S. equity markets have been in a holding pattern since early September, Europe has been holding since June, and most other global markets are in bear market formations where the rallies have held and are going nowhere, Roger Hirst told Real Vision during today’s Daily Briefing.
Hirst said it’s common for markets to go sideways before an election and then have a relief rally no matter which side wins because there is finally more certainty. He thinks we’ll likely see this in the U.S., especially because both sides will do more fiscal going forward.
Hirst also shared his thoughts on the currency strength in Europe that followed their stimulus, and said it may be running out of steam. Given the second virus wave and the state of European banks, he believes the euro may pull back.
Turning his attention to the bond market, Hirst argued that central banks can’t let yields go too high, so being short bonds is not the right trade. They can’t let things get to the level on the 10-year that will blow things up, he said, so they will suppress yields and that will make the environment incredibly hard to price. He believes the safety valve for the inflation play will be precious metals and he remains bullish on gold.
Hirst concluded the interview with his thoughts about the U.S. and Europe’s differing approaches to stimulus. He said the U.S. will probably see higher levels of bankruptcy sooner than Europe, but because Europe is supporting jobs that are never coming back, they’re in a position of having to support them ad infinitum, which is contributing to the zombification of the European system.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This is pretty obvious, but we should probably say it anyway so that there is absolutely no confusion… The material in REAL VISION GROUP video programs and publications (collectively referred to as “RV RELEASES”) is provided for informational purposes only and is NOT investment advice. The information in RV RELEASES has been obtained from sources believed to be reliable, but Real Vision and its contributors, distributors and/or publishers, licensors, and their respective employees, contractors, agents, suppliers and vendors(collectively,”Affiliated Parties”) make no representation or warranty as to the accuracy, timeliness or completeness of the content in RV RELEASES. Any data included in RV RELEASES are illustrative only and not for investment purposes. Any opinion or recommendation expressed in RV RELEASES is subject to change without notice. RV Releases do not recommend, explicitly nor implicitly, nor suggest or recommend any investment strategy. Real Vision Group and its Affiliated Parties disclaim all liability for any loss that may arise(whether direct, indirect, consequential, incidental, punitive or otherwise) from any use of the information in RV RELEASES. Real Vision Group and its Affiliated Parties do not have regard to any individual’s, group of individuals’ or entity’s specific investment objectives, financial situation or circumstances. RV Releases do not express any opinion on the future value of any security, currency or other investment instrument. You should seek expert financial and other advice regarding the appropriateness of the material discussed or recommended in RV RELEASES and should note that investment values may fall, you may receive back less than originally invested and past performance is not necessarily reflective of future performance. Well that was pretty intense! We hope you got all of that – now stop reading the small print and go and enjoy Real Vision.