Big banks across the board are preparing for an economic downturn. As inflation rises, banks are getting ready for missed and lost loan payments. “Banks are always going to try and get ahead of the curve,” said Devin Ryan, Director of Financial Technology Research at JMP Securities, a Citizens company. In other news, investors are keeping a close eye on Merrill Lynch’s investment thesis, FAANG 2.0, in which gold plays a significant role.
Yahoo Finance/Derek Thompson
‘Things probably will get worse’ — Big banks brace for an economic downturn: Morning Brief
The largest banks in the United States said the American consumer has never looked so good.
All while readying their recession playbooks as the economic outlook deteriorates.
As JPMorgan Chase (JPM) CEO Jamie Dimon said Thursday, “there’s a range of potential outcomes.”
And bank earnings over the past several days show companies making preparations for those that are more negative.
Last week, JPMorgan Chase and Citigroup (C) suspended share buybacks to give themselves “maximum flexibility” through the bear market. And on Monday, Goldman Sachs (GS) said it would “slow hiring velocity” as it navigates 2022’s choppy market waters.
Continue reading, here.
Business Standard/Puneet Wadhwa & Harshita Singh
Is it a good strategy to invest in gold right now?
Gold ended the first half of calendar year 2022 0.6 per cent higher at 1,817 dollars per ounce. The yellow metal initially rallied as the Ukraine war unfolded and investors sought safety amid increased geopolitical uncertainty.
However, some of these early gains got trimmed as investors shifted their focus to monetary policy and higher bond yields. The impact was felt across asset classes.
In the near term, analysis believe, gold prices will react to speed at which global central banks tighten monetary policy in an effort to control inflation.
According to World Gold Council, though interest rate hikes by central banks may create headwinds for gold, many of these hawkish policy expectations are already priced in.
Keep reading, here.
MonetaryMetals/ Dickson Buchanan Jr.
Is Gold About To Go Mainstream?
Every week Merrill Lynch publishes a Capital Market Outlook Letter. The letters provide market commentary, research and analysis, and the occasional investment idea. Merrill Lynch (together with parent Bank of America) is the third largest brokerage firm, managing over $3 Trillion in client assets. When a firm of that size speaks up, you should listen.
Starting around March of this year, they disclosed an investment thesis called FAANG 2.0. It’s a fascinating idea and gold plays a prominent role. Let’s unpack it.
The original FAANG acronym described the high-growth, tech-centric companies that accounted for an outsized portion of returns over the last decade, and then catapulted even higher once the pandemic hit. FAANG 1.0 included: Facebook – Apple – Amazon – Netflix – Google
And yet, these companies have experienced meaningful price declines year-to-date.
You can read the full article, here.