Monday Espresso

The 2020 US Presidential election was held on Tuesday November 3.  By the noon of Friday November 6, Joe Biden has taken the lead of the presidential race, winning 264 electoral votes according to Associated Press, only 6 electoral votes shy of becoming the president-elect.

On Wednesday November 4, the US Fed decided to leave the federal funds rate target range unchanged at 0.00-0.25% as expected. The bank continued to keep a dovish tone and promised to use its full range of tools to support the US economy to recover from the coronavirus pandemic.

On Thursday November 5, the BoE made interest rates decision to keep the benchmark Bank Rate unchanged at 0.1%. The bank concluded the economic outlook still as “unusually uncertain” and increased its bond-buying programme by £150bn, taking the total value of bond purchase to £875bn.

US nonfarm payrolls data was published on Friday, showing an employment increase of 638k in October, beating the estimates of 580k. The US unemployment rate decreased by 1.0% in October compared to September, standing at 6.9%.

  China CPI for October will be announced on Tuesday November 10, with an expectation of 0.8% YoY.

US CPI for October will also be released on Thursday November 12, with an expectation of 1.3% YoY.

-0.07*

-1.0     A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.

0.0       A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.

+1.0   A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.

*as at latest realignment 31/10/20

Notice:

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.