Money managers at the virtual Milken 2020 Global Conference were largely bullish about stocks, but they outlined a litany of risks facing investors.

Uncertainty on multiple fronts is leaving investors trying to position for a range of outcomes—even the possibility of burgeoning debt loads leaves the U.S. facing a systemic financial crisis or a move toward socialism.

The annual conference, sponsored by former junk-bond investor Michael Milken’s Milken Institute think tank, brings together business leaders, policy makers, money managers, and Wall Street power brokers and is taking place online through Oct. 21.

Myriad uncertainties created by the variance in how countries were dealing with the pandemic, populism, geopolitical tensions, and broader divisiveness are forcing investors to grapple with an array of outcomes as varied as a multidecade growth slump or 1970s-style stagflation and requires “an enormous” amount of diversification, said Bridgewater Associates CEO David McCormick.


Carlyle Group

CEO Kewsong Lee called out the uneven nature of the recovery, even within asset classes and sectors. And while the 2008-09 financial crisis saw a lot of solvent companies become illiquid, the massive stimulus this year has left a lot of insolvent companies that are liquid—including many in industries with existential issues ahead, Lee said. That requires caution as investors look through battered industries.

A lot depends on the trajectory of the virus, but Agnès Belaisch, Barings Investment Institute’s chief European strategist, played down the magnitude of the risk posed by recent rise in Covid-19 cases in Europe. At the beginning of the crisis, about 40% of the population was furloughed, but that is now down to just 6%. “It’s a slow process, but a process back to normal,” Belaisch said. She argued that European policy makers’ ability to get monetary and fiscal policy through without talk of austerity and a focus on

JPMorgan Chase  (JPM) – Get Report is often considered a best-in-breed bank stock, which is why investors will be looking for the company to be a leader as this earnings season kicks off.

JPMorgan will report earnings on Tuesday before the open along with Citigroup  (C) – Get Report and ahead of others like Bank of America  (BAC) – Get Report, Wells Fargo  (WFC) – Get Report and Goldman Sachs  (GS) – Get Report.

Unlike the S&P 500, which has made new 52-week highs, JPMorgan and the banks continue to struggle.

While off the lows, plenty of technical damage remains. Investors will look to see if management is less cautious than it was in the summer and if the consumer is looking better or worse from three months ago.

If investors like what they hear, it could trigger a nice move higher for JPMorgan and its peers this quarter. If not, it could put bulls in a tough spot as we progress through the fourth quarter.

JPMorgan and Goldman Sachs are holdings in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells JPM or GS? Learn more now.

Trading JPMorgan Stock

Daily chart of JPMorgan stock.

Daily chart of JPMorgan stock.

Surprisingly, when the rest of the market was pulling back in the first half of September, JPMorgan stock held steady. The decline in tech was spilling over into the indices, but not into the financials. However, the group couldn’t hold up forever.

JPMorgan stock ended up selling off in the second half of September and testing down into range support near $90.

Since testing into support, JPMorgan stock has rebounded sharply, reclaiming the 20-day and 50-day moving averages in

SHANGHAI (Reuters) – China’s move to cool a rising yuan stands little chance of stopping further gains, international banks say, as the strength of the world’s number two economy and a near-record yield advantage drive big and steady inflows.

Over the weekend, the People’s Bank of China (PBOC) scrapped a requirement for banks to hold a reserve of yuan forward contracts, removing a guard against depreciation and sending the currency down 1% for its steepest drop since March.

Yet an identical move three years ago ultimately proved ineffective, and investors say this time the conditions are even more likely to buoy the yuan, perhaps as far as 6.5 per dollar.

“In all previous instances, the impact of the regulatory change was temporary,” said Eugenia Victorino, head of Asia strategy at Swedish bank SEB in Singapore.

“We continue to expect the yuan to remain on an appreciation trend, with USD/CNY approaching 6.60 by end-2021,” she said.

Goldman Sachs forecasts yuan, last quoted at 6.7436

, will hit 6.5 per dollar in 12 months.
=>

Much as in 2017, the PBOC’s move follows a long spell of appreciation. The yuan has strengthened more than 6% since late May and just closed its best quarter in a dozen years as China leads the world out of the coronavirus pandemic and soaks up capital flows.

Foreign holdings of Chinese government debt rose at the fastest pace in more than two years last month, with the spread between Chinese

and U.S. 10-year

government bond yields holding near record highs scaled in July. In another nudge for the yuan to weaken, Beijing granted $3.4 billion in outbound investment quotas last month, the first fresh permission for such flows since April 2019.
=rr>
=rr>

Yet analysts say China’s economy, projected to keep growing as the rest of

(Reuters) – Goldman Sachs said the outcome of U.S. elections would not impact its bullish oil and natural gas outlook and that an overwhelming Democratic victory could be a positive catalyst for these sectors.

Goldman reiterated its bullish 2021 view for both natural gas and oil, saying drivers for higher prices supersede the potential outcomes of the U.S. election.

“The recent gyration in oil prices, rallying on days of higher expected stimulus and weakening dollar, suggest that a Biden election and blue sweep could in fact prove a bullish catalyst for oil,” the bank said, adding that natural gas prices could rally too.

Opinion polls show presidential candidate Joe Biden with a substantial lead over President Donald Trump nationally, although with a narrower advantage in some of the states that may decide the Nov. 3 election.

Headwinds to U.S. oil and gas production would rise further under a Biden administration, with the potential for regulations raising the cost of shale production and reducing recoverable shale resources, Goldman added.

Biden’s climate priorities also point to a faster deployment of renewable sources of energy than currently expected, Goldman said, adding such an agenda would require new infrastructure, which alongside a likely large initial fiscal stimulus, would lead to higher oil demand in coming years.

(Reporting by Nakul Iyer and Eileen Soreng in Bengaluru. Editing by Gerry Doyle)

Copyright 2020 Thomson Reuters.

Source Article

In the past 72 hours, Yearnfinance (YFI) surged by 58% after dropping to as low as $12,260 at a few exchanges. 

Three factors that may have catalyzed the sharp rebound are: YFI had become deeply oversold, lead developer Andre Cronje’s deep commitment to the project and the ever expanding use cases for YFI within a large ecosystem.

YFI was deeply oversold

Over the past month DeFi tokens endured a brutal correction which saw the value of many DeFi tokens drop by 40%-70%. The sell-off appears to be primarily led by corrections in Bitcoin (BTC) and Ether (ETH) but now that BTC has turned $11K to support, traders are watching to see if YFI and other tokens will continue to rise higher.

YFI/USDT daily chart. Source: TradingView.com

As Cointelegraph reported, the strong fundamentals of the top DeFi projects was a hint that the market was oversold.

At the time data showed that revenues of most DeFi protocols were actually increasing while token prices fell sharply, indicating that they are likely below fair value.

Revenue change versus token price change of major DeFi networks. Source: Twitter.com

Yearn.finance, as an example, has been on the cusp of releasing the second version of its vaults.

Typically, major product launches and updates would cause the underlying token to rise but the overall weakness in the DeFi market caused YFI price to drop lower throughout September and October.

The total value locked across Yearn.finance products is also hovering above $900 million. This indicates that almost $1 billion worth of capital has been deployed across the Yearn.finance platform.

Total value locked in Yearn.finance. Source: Stats.finance

Andre Cronje assures the community he is not leaving

In the past week there have been rumors that lead developer, Andre Cronje, is leaving the Yearn.finance project after hackers managed to siphon