Author — Martin Young, CEO of Farringdon Asset Management

Global Macro Review

• Major markets rallied to all time high levels.

• Goldman Sachs Chief strategist reiterates target of 5200 for end of 2024.

• Main driver is the market reacting to the recent inflation data.

US Markets

• US labour department announced that inflation drop to 3.4% from 3.5%.
• With good employment statistics and better wages reporting, these will contribute to the core inflation numbers.
• However, US market experiencing recession is unlikely.
• The market may be overly positive as inflation has only come back down to January 2024 levels.
• Farringdon view is there may not be a rate cut in 2024.
• Advisors who have clients in leverage ETF should start to trim positions and wait for better valuations.

Commodities Markets

• Drivers for better oil valuations is due to:
  • Saudi King health deteriorating which leads to the prince cancelling his trip to Japan.
  • Iran president dies in helicopter crash.
• Gold prices has rose to all time high levels to USD 2449 as market bets on September interest rate cuts.
• Silver valuation has significantly improved to USD 32.306 from USD 22 in February 2024.
• Silver market is heavily manipulated.
• Farringdon view is that advisor should avoid buying into silver at the USD 30 mark.
• Historically when silver reached USD 30, prices crash dramatically.

Farringdon View On Markets

• The CSI 300 index is up 16% since February 2024.
• Main driver is the stimulus and efforts of the Chinese regulator to improve economic situation.
• Chinese regulators in Beijing have made efforts to encourage fund managers to invest in China again.
• China is launching stimulus bond package worth about 130 billion this week.
• China has also announced stimulus measures of 62 billion loans to local government to buy empty houses for social housing.

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Farringdon Capital Ltd is incorporated in the Dubai International Financial Centre (DIFC) under number 4190, and regulated by the Dubai Financial Services Authority (DFSA).

The information contained in this document is for information only and should not be taken as a recommendation to buy or sell. Investors are reminded that past performance is no indication of future performance.