Post by FD1000 on Apr 5, 2023 12:38:44 GMT
(thepatientinvestor.com/index.php/2023/04/03/economic-outlook-march-2023/)
APRIL 3, 2023 BY COLIN TWIGGS
Economic Outlook, March 2023
Here is a summary of Colin Twiggs’ presentation to investors at Beech Capital on March 30, 2023. The outlook covers seven themes:
1) Elevated risk
2) Bank contagion
3) Underlying causes of instability
4) Interest rates & inflation
5) The impact on stocks
6) Flight to safety
7) Australian perspective
6. Flight to Safety
Elevated risk is expected to cause a flight to safety in financial markets.
Cash & Treasuries: The most obvious safe haven is cash and term deposits but recent bank contagion has sparked a run on uninsured bank deposits, in favor of short-term Treasuries and money market funds.
Gold: Gold enjoyed a strong rally in recent weeks, testing resistance at $2,000 per ounce. Breakout above $2,050 would offer a target of $2,400.
Spot Gold:A surge in central bank gold purchases — to a quarterly rate of more than 400 tonnes — is boosting demand for gold. Buying is expected to continue due to concerns over inflation and geopolitical implications of blocked Russian foreign exchange reserves.
Defensive sectors: Defensive sectors normally include Staples, Health Care, and Utilities. But recent performance on the S&P 500 shows operating margins for Utilities and Health Care are being squeezed. Industrials have held up well, and Staples are improving, but Energy and Financials are likely to disappoint in Q1 of 2023.
Commodities: Commodities show potential because of massive under-investment in Energy and Battery Metals over the past decade. But first we have to negotiate a possible global recession that would be likely to hurt demand.
APRIL 3, 2023 BY COLIN TWIGGS
Economic Outlook, March 2023
Here is a summary of Colin Twiggs’ presentation to investors at Beech Capital on March 30, 2023. The outlook covers seven themes:
1) Elevated risk
2) Bank contagion
3) Underlying causes of instability
4) Interest rates & inflation
5) The impact on stocks
6) Flight to safety
7) Australian perspective
6. Flight to Safety
Elevated risk is expected to cause a flight to safety in financial markets.
Cash & Treasuries: The most obvious safe haven is cash and term deposits but recent bank contagion has sparked a run on uninsured bank deposits, in favor of short-term Treasuries and money market funds.
Gold: Gold enjoyed a strong rally in recent weeks, testing resistance at $2,000 per ounce. Breakout above $2,050 would offer a target of $2,400.
Spot Gold:A surge in central bank gold purchases — to a quarterly rate of more than 400 tonnes — is boosting demand for gold. Buying is expected to continue due to concerns over inflation and geopolitical implications of blocked Russian foreign exchange reserves.
Defensive sectors: Defensive sectors normally include Staples, Health Care, and Utilities. But recent performance on the S&P 500 shows operating margins for Utilities and Health Care are being squeezed. Industrials have held up well, and Staples are improving, but Energy and Financials are likely to disappoint in Q1 of 2023.
Commodities: Commodities show potential because of massive under-investment in Energy and Battery Metals over the past decade. But first we have to negotiate a possible global recession that would be likely to hurt demand.
