Key Points
- Asia markets set to come under pressure as U.S.-China ties worsen [1]
- Investors rush into gold and other havens as stocks near highs [2]
In the latest deterioration in Sino-U.S. ties, the United States ordered China to close its consulate in Houston, saying it was “to protect American intellectual property and Americans’ private information.” [1]
“Sentiment was mixed, with recent optimism dented by news of U.S.-China consulate closures,” Imre Speizer and Tim Riddell wrote for Westpac Banking Corporation. [1]
Prices for gold are up 22% this year and stand near record levels, as the metal draws investors seeking shelter from a potential reversal in stocks. The Swiss franc is among the year’s best performing currencies and allocations to cash remain historically elevated. [2]
Only 14% of fund managers in a July survey from BofA Global Research believe the recovery will be a quick, “V-shaped” one, down from 18% last month. Cash levels among investors remain high on a historic basis, at 4.9%, the survey showed. [2]
“What’s driving markets right now is Fed action,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. Her firm added gold to its asset allocation models in April. [2]