CNBC/Saheli Roy Choudhury
Gold will be a winner no matter who clinches the U.S. election, investor says
Gold and gold miners are set to benefit no matter who wins the U.S. election this week, one investor told CNBC.
That’s because the United States will likely to adopt a sizeable fiscal stimulus program no matter which candidate wins the presidency, James Rasteh, CIO of Coast Capital, told CNBC’s “Squawk Box Asia” on Tuesday.
“We would be printing trillions of dollars more and all of that ultimately has extraordinarily positive repercussions for gold,” he said.
“The fiscal and monetary policies would be almost identical under either leadership. I think that the differences that are being delineated are really more imaginative than real,” Rasteh added.
Fiscal stimulus — or policies such as government spending or tax reduction aimed at boosting economic activity — typically leads to a wider deficit. That could undermine investor confidence and prompt them to put their money into safer assets such as gold, and in turn, push gold prices higher.
A report from the World Gold Council last week said worldwide demand and supply for the precious metal fell last quarter due to the coronavirus pandemic.
Rasteh explained that gold miners are spending more capital now to look for new gold and even when it is found, the quality of the precious metal discovered is much lower. “We are discovering a lot less gold than we are producing,” he said, adding that in a decade, “we will be producing 50% less gold than we do today.”
Stocks Are In Trouble No Matter Who Wins The Election
In the short-term, the U.S. stock market looks ripe for a rally. Big important stocks and the indices as a whole came into this week after a selloff that left them sitting on strong support — places where technicians would expect a bounce. VIX is dialed up to near 40, and options data show traders are buying downside hedges and far out-of-the-money puts on the S&P 500.
It stands to reason a good chunk of that positioning reflects investor anxiety around whether or not the election goes smoothly. Let’s define smoothly as 1) certainty about a winner within a few days and, to a lesser degree, 2) that the outcome is in line with current prediction markets expecting a Biden win and Democratic Congress. Moving past this event should be negative for vol and positive for stocks. Once we know the winner, the market can go back to reflecting broader changes in the economic landscape.
The very odd problem for investors is that this landscape is improving, and it has not been conducive to higher stock prices. Instead, persistent economic recovery is chipping away at sky-high tech valuations in expensive growth stocks that thrived during quarantine. That is proving more decisive to the overall direction of the S&P 500 than strength in companies tied to economic improvement.
The bear case for the stock market right now is incredibly simple, and incredibly compelling: tech-stock valuations will not get better than they were during quarantine, and growth stocks will continue to drag on the market. It’s going to be very tough for the next President to reverse this.
Fox Business/Daniella Genovese
Nearly 60% of Americans fear election result will hurt their savings
A majority of Americans are concerned that the outcome of the 2020 presidential election will damage their financial well-being, according to new research by Oxygen.
Some 55% have been saving more in preparation, Oxygen found, and nearly 60% are concerned about their financial stability afterward.
For some — roughly 32% — the push to start saving began four years ago, when Hillary Clinton lost the 2016 presidential race to Donald Trump. About 62% of Democrats are worried about their savings, compared with 60% of Republicans.
In addition to the election, more than 60% of Americans fear that another wave of the COVID-19 pandemic will reduce their wealth.
The disease, which has killed more than 230,000 Americans, prompted the closure of a wide swath of businesses this year. Many have only partially reopened, leading to the worst downturn since the Great Depression.
Roughly 40% of the nation’s labor force has sought jobless aid since mid-March, and many employers say more layoffs are in store.