Kaiser Partner Privatbank - Monthly Market Monitor October 2020

Monthly Market Monitor

October 2020

Table of contents Satellite View Geopolitical heat map

In a Nutshell

Our view on the markets

07

04 Macro Radar

Theme in Focus Has the equity market decoupled from

Taking the pulse of

economic reality?

Asset Allocation Notes from the Investment Committee

08

economic activity

The Back Page

10

06

Asset classes & agenda

ESG - Sustainability Corner Investing impactfully with a clear conscience

12

11

Kaiser Partner Privatbank AG | Monthly Market Monitor - October 2020

3

In a Nutshell

Our view on the markets

US presidential election race in the home stretch The long wait will be over a good three weeks from now when US citizens finally cast their votes, but no one knows whether that will put an end to the ongoing uncertainty (on the financial markets). Although Joe Biden made a better impression than Donald Trump in their first televised debate and further extended his lead in the polls, one cannot make a firm prediction that the Democrats will win the election. A scenario in which the election outcome remains undecided for a lengthy time cannot be ruled out. Such a scenario could result in daily news flow causing erratic price movements on securities exchanges.

Bickering over an economic stimulus package In early October, Donald Trump abruptly tweeted a halt to the weeks-long negotiations between Democrats and Republicans over a new economic stimulus package, only to change his mind a few hours later. Fading consumer confidence at present suggests that a fiscal stimulus deal is likely to be reached sooner or later, further enlarging the USA’s federal budget deficit.

Renewed growth setback in fourth quarter The economic growth engine has started to sputter again these days not just on the far side of the Atlantic. The spiraling COVID-19 case counts in a number of countries are also dimming economic prospects in Eu-

Chart of the month Eagerly awaited | A vaccine could already become available next year When will enough doses of a COVID-19 vaccine be available to inoculate 25 million US citizens?

100%

80%

60%

40%

20%

until Q1 2021

Q2 2021 - Q3 021

Q4 2021 - Q1 2022

after Q1 2022

Sources: Good Judgment Inc., Kaiser Partner Privatbank

4

Monthly Market Monitor - October 2020 | Kaiser Partner Privatbank AG

04.10.20

26.09.20

18.09.20

10.09.20

02.09.20

25.08.20

17.08.20

09.08.20

01.08.20

24.07.20

16.07.20

08.07.20

30.06.20

22.06.20

14.06.20

06.06.20

29.05.20

21.05.20

13.05.20

05.05.20

27.04.20

0

rope. Business sentiment has notably worsened again lately, particularly in the service sector. GDP growth forecasts for the fourth quarter were recently revised downward again. It may now take until 2022 for economic activity to return to the pre-crisis level.

Correction on the equity market September once again lived up to its reputation as being a historically tough month for stocks, giving the (US) equity market its first share-price declines since April.

This cooled the previously overheated technical indicators, and the previously partially euphoric investor sentiment returned to normal. The medium-term outlook for stocks remains bullish, in our opinion, not least due to the lack of investment alternatives. However, the ongoing political uncertainties have to be resolved before a new (upward) trend can take hold.

Alternative assets are a key portfolio component The yield outlook in the fixed-income sector, where there has long been a veritable dearth of decent investment opportunities, currently appears to be 100% fixed at 0% interest income. The alternative assets sector thus looks destined to gain increasing importance in the years ahead. Within the alternatives segment, we believe that gold belongs in any diversified portfolio, as does real estate, preferably in the form of internationally focused real estate funds.

The novel coronavirus remains a driving issue on the financial markets. Recent weeks have seen good news about successful achievements in the development of a COVID-19 vaccine regularly spark short-term price advances on stock exchanges and disappointing news trigger short-term price dips. The COVID-19 issue is unlikely to fade into the background on the markets until a safe vaccine has been found. The superforecasters at Good Judgment Inc. see a high probability that a vaccine will become available as early as Q1 2021 and a very high probability of a vaccine being delivered by Q3 2021. A breakthrough in research and development would be helpful to more than just the financial markets. The current uncertainty is also acting as a brake on businesses and consumers. The successful development of a vaccine would release the brake and enable a more dynamic recovery in economic activity.

Kaiser Partner Privatbank AG | Monthly Market Monitor - October 2020

5

Macro Radar

Taking the pulse of economic activity

The macroeconomic data over the last few weeks confirm our expectation that the economic recovery from the coronavirus crisis will not follow a V-shaped trajectory. Now that central banks have largely shot all their powder, governments continue to be called upon to assist in stimulating economic activity.

Divided consumer confidence Thanks to government support, US citizens had more money in their pockets during the summer months than they did prior to the public health crisis. Vibrant consumer spending was thus a key sustaining driver of economic activity. However, COVID-19 relief payments have largely dried up since July, and this is also reflected in the latest consumer confidence data. Consumer sentiment is particularly dismal among younger people and low earners. If this trend continues, social polarization in the USA looks destined to worsen further.

Wrangling over a US fiscal package The US Congress had spent weeks negotiating another relief package aimed at mitigating the adverse economic (and social) effects of the coronavirus pandemic until President Donald Trump tweeted a directive to

Dim prospects for the future? | Younger people are less optimistic US consumer confidence (Conference Board)

suspend all talks until after the elections. It remains to be seen whether that’s the final word on the matter because an absence of further support measures could alienate voters. So, a last-minute deal cannot be ruled out. But even if there isn’t one, a new relief program is still likely to be enacted early next year at the latest.

U or W? A second wave of coronavirus cases and governments’ tightened contagion containment measures are also taking a toll on Europe. Business sentiment markedly worsened again in September, particularly in the service sector. The manufacturing sector is the only one holding relatively steady at the moment. But on balance, the near-term economic outlook has dimmed a bit again in the wake of the summer rebound. Growth forecasts for the fourth quarter were recently revised downward again. The only question is whether the economic recovery will follow a U-shaped or W-shaped trajectory – a V-shaped recovery can already be ruled out today.

160

PEPPing it up Core inflation in the Eurozone plummeted to a new alltime low in September in what can definitely be called a massive divergence from the European Central Bank’s projections and inflation target. ECB President Christine Lagarde recently already hinted that the inflation target could soon be adjusted following the example set by the US Federal Reserve. But before the ECB’s inflation target gets changed, its Pandemic Emergency Purchase Program (PEPP) is likely to be expanded or at least extended in light of the (overly) low inflation.

140

120

100

80

60

under 35 years

2020

2018

2016

2014

2012

40

over 55 years

Sources: Bloomberg, Kaiser Partner Privatbank

Consensus estimates

Kaiser Partner Privatbank interest rates view 2019

2020

2021

GDP growth (in %)

3M

12M

Switzerland

0.8

-5.1

3.9

Switzerland

-0.75

→

→

Eurozone

1.2

-8.0

5.5

Eurozone

-0.50

→

→

UK

1.3

-10.0

6.3

UK

0.10

→

→

US

2.3

-4.3

3.8

US

0.25

↗

↗

China

6.1

2.1

8.0

China

2.95

→

→

Inflation (in %)

10-year yields (in %)

Switzerland

0.4

-0.7

0.1

Switzerland

-0.49

→

→

Eurozone

1.2

0.3

1.0

Eurozone

-0.50

→

→

UK

1.8

0.9

1.4

UK

0.30

→

→

US

1.8

1.2

1.9

US

0.77

→

→

China

2.9

2.8

2.3

China

3.15

→

→

Sources: Bloomberg, Kaiser Partner Privatbank 6

Last Key interest rates (in %)

Monthly Market Monitor - October 2020 | Kaiser Partner Privatbank AG

Sources: Kaiser Partner Privatbank

Satellite View Geopolitical heat map

US presidential election race The finish line is gradually coming into sight in the race for the presidency of the world’s largest national economy. Democratic challenger Joe Biden continues to lead in the polls, but the election could end in a photo finish in a few crucial swing states. Donald Trump has already proclaimed to the media that he would be unwilling to vacate the White House without a fight under certain circumstances. The fact that an especially large number of US citizens will be voting by mail this time is bound to complicate matters and is likely to hamper a quick, definitive election verdict.

USA vs. China The conflict between the United States and China is simmering on a number of different burners. The trade quarrel has calmed down a bit lately, but it’s already foreseeable today that China will not be able to keep

its import volume promises to the USA, so this issue likely will soon be back on the agenda. The Americans, meanwhile, are constantly ratcheting up the pressure on Chinese companies. And the rattling of sabers continues in the South China Sea. Brexit countdown The ongoing post-Brexit negotiations between the European Union and the UK have entered the home stretch after the summer break. The unofficial deadline for reaching an agreement is by October 31, which would give national parliaments enough time to ratify a secession treaty before the UK’s official exit from the EU at year-end. But there are still many contentious points on matters such as fishery rights, dispute arbitration and state aid subsidies. We see a high risk of a no-deal outcome, but political dodges will probably be employed to “manage” a potential hard Brexit.

Geopolitical developments do not stop at the gates of the financial markets.

On the contrary, they have become an increasingly important influencing variable in recent years. Our Satellite View takes a look at the major hotspots at the moment.

Kaiser Partner Privatbank AG | Monthly Market Monitor - October 2020

7

Asset Allocation

Notes from the Investment Committee

Autumn this year will once again live up to its reputation as often being a turbulent season for stock markets. Equity-market volatility looks set to stay high in the weeks ahead.

If the correction broadens further, it could open up new buying opportunities.

Asset allocation monitor -

+

-

Cash

Equities

Fixed Income

Global

Sovereign bonds

Switzerland

Corporate bonds

Europe

Microfinance

UK

Inflation-linked bonds

US

High-yield bonds

Emerging Markets

Emerging markets bonds

Alternative assets

Insurance-linked bonds

Commodities

Convertible bonds

Gold

Duration

Real estate

Currencies

Hedge funds

US dollar

Structured products

Swiss franc

Private equity

+

Euro British pound

Equities: Stock-market rollercoaster Scorecard • September ushered in autumn and brought ele+ vated volatility to the equity markets, as it so often Macro does. Daily fluctuations of more than 1% have been Monetary/fiscal policy more the rule than the exception over the last sev- Earnings eral weeks. The numerous elements of uncertainty Valuation and the high volatility have largely brought investor Trend sentiment back to normal – the summer euphoria Sentiment has vanished. From an investor’s perspective, this should be interpreted as a positive development because it lays the foundation for a new upleg for tive terms as a result of their respective, somewhat stock prices, which could commence later on this overstretched downward and upward trends and year starting from lower share-price levels. the recent mild uptick in bond yields. We consider • The copious liquidity being funneled to the financial this rotation a natural, healthy correction within an markets by central banks remains one of the main intact long-term trend. We expect the growth inarguments for keeping a constructive medium-term vestment style to resume its outperformance on a stance on stocks, true to the motto that “there is longer-term horizon. no alternative (TINA).” For the nearer term, however, the economic fundamentals aren’t entirely negligi- Fixed income: US yields in an uptrend ble, and they make our stocktaking of the situation • The yield on 10-year US Treasury notes has slowly but less bullish at present. The macro data give reason steadily crept upward since August to around 0.8% at to expect a renewed setback for the fourth quarter. last look. The uptrend is being caused in part by the After corporate earnings estimate revisions recently US Federal Reserve’s altered monetary policy stance. turned upward, momentum now looks set to fade Under its new inflation-averaging regime, the Fed is here as well. Last but not least, the upcoming US deliberately willing to allow inflation to overshoot its elections remain a huge element of uncertainty that target, which is putting upward pressure on longerhas to be resolved before a new (upward) trend on term market interest rates. However, a plurality of the equity markets can take shape.

Fed board members recently again rejected the idea • Value stocks have regained some lost ground in reof introducing a negative federal funds rate or initicent days while growth stocks have slipped in relaating moves to start managing the yield curve. This 8

Monthly Market Monitor - October 2020 | Kaiser Partner Privatbank AG

relatively high and stable risk-adjusted returns, and a gives yields at the long end of the curve more leelow correlation to other asset classes. We recently way. Yields are also being driven by hopes for another further enlarged the allocation to this asset segment stimulus package and by expectations of a recovery in in our portfolios. economic activity. We’re proceeding on the assumption that a continuation of the yield uptrend will stall Currencies: Record-high SNB intervention frenzy out for the time being at the 1% level.

• Positive long-term yields on high-grade European • EUR/USD: The European Central Bank (ECB) Governing Council has achieved its objective for the moment. Its government bonds haven’t been anywhere in sight verbal interventions in early September initially paid for a long time now. In contrast to the USA, negative off and sent the euro into correction mode, keeping policy rates are the norm on our side of the Atlantic. the EUR/USD exchange rate’s long-term downtrend Some voices on the European Central Bank Governintact. Market participants’ continued large net long ing Council have recently even been heard portraypositions on the futures markets point as well to an ing a further lowering of negative interest rates as a extension of the consolidation. ECB President Lagarde, viable option. The yield prospects for bond investors who recently brought the possibility of even lower inin Europe are very meager against this backdrop – terest rates into play, is currently not doing anything to apart from a few exceptions, the fixed-income asset impede the euro from weakening further. class these days is 100% fixed at 0% interest income.

• GBP/USD: In the last issue of Monthly Market Monitor, we wrote in this space that the risk premium for a poAlternative assets: Real estate as a sound portfolio tential political mishap in the UK’s negotiations with addition the EU was inadequately priced into the British pound.

• Real interest rates increased as well over the past This concern is now largely allayed in the wake of the several weeks. This signified a headwind for the GBP/USD exchange rate’s failure to breach the techniprice of gold due to rising opportunity costs, so the cal resistance at the 1.35 mark and its significant dip in yellow metal saw its price slip by around 3% in SepSeptember. The Bank of England’s reiterated rejection tember. In the longer-term chart picture, though, of the idea of introducing a negative policy interest the gold-price dip over the last two months should rate also benefits sterling. We expect to see rangebe viewed as a healthy correction within an intact bound movement in the near term. uptrend channel. Gold remains a key diversifying • EUR/CHF: To increase its transparency, the Swiss Nacomponent of our portfolios. tional Bank (SNB) intends to issue quarterly disclo• Alongside gold, investments in real estate are likewise sures on its currency-market interventions in the fuan interesting and comparatively attractive alternative ture. The data released in late September reveal that at a time when there are hardly any decent investment the SNB spent around CHF 90 billion in the first half of opportunities in the fixed-income sector. However, it 2020 on forex interventions to weaken the Swiss franc. all depends on the type of real estate investment.

That amount is more than in any previous year and is Exchange-traded real estate investment trusts (REITs), a steep price to pay considering that the franc continfor example, exhibit a high correlation and high beta ues to trade at a very high exchange-rate level despite to the equity market and thus can hardly be viewed this expenditure. We think the franc looks destined to as a stabilizer. Diversified real estate funds, in contrast, stay strong in the months ahead. possess desired attributes such as good diversification,

Chart in the Spotlight A need for hedging | November 3 looming large VIX futures curve 33

32

31

30

29

28

21 6.

21

21

5.

.0 16

.0 19

21

4.

3.

.0 21

21

21

2.

.0 17

.0

1.

20 2.

.0

17

20

.1

20

Sources: CBOE, Kaiser Partner Privatbank

16

20

1.

1.

.1 18

20 1.

.1 11

20 0.

.1 04

20 0.

.1 28

.1

0. .1 14

21

20

27

The waiting for the US presidential election will be over around three weeks from now, but November 3 is unlikely to put an immediate end to the ongoing uncertainty.

Although public-opinion polls and betting markets show Donald Trump trailing Joe Biden by a wide margin at the moment, the race could nonetheless turn out to be a tight one. Statistics on third-quarter GDP growth (due to be released on October 29) are likely to reveal a substantial pickup in economic activity. And President Trump’s recent brief hospital stay also could work to his advantage. In any event, there’s an elevated probability that the election outcome will initially be contested, not least because many US citizens will be voting by mail this time.

The risk of turbulent days (and weeks) in Washington D.C. has already long since been priced in by investors. The futures curve for the VIX “fear barometer” is inverted and implies that normalcy won’t return until next year.

Kaiser Partner Privatbank AG | Monthly Market Monitor - October 2020

9

Theme in Focus

Has the equity market decoupled from economic reality?

The COVID-19 pandemic has left the world economy in tatters, but the (US) equity market hit a new all-time high in early September. Is this a classic case of “irrational exuberance”, or could it be a signal that the economic outlook is much better than generally assumed? The latter supposition is rather unlikely to be true.

Equity Market ≠ Economy…

Finance theory teaches that stock prices should reflect the discounted long-term future stream of expected dividend payouts. Those payouts, in turn, should correlate with corporate earnings growth, which one would expect to stand in close relation with underlying economic conditions. Hence, although stock prices often deviate considerably from the economic fundamentals in the medium term, one should definitely expect to see a certain longterm correlation between equity-market performance and economic growth. In fact, in real-world practice there is indeed a loose correlation, but with occasional big divergences. We currently are witnessing one such major divergence: the S&P 500 index hit a new all-time high a few weeks ago while the economy lies prostrate, steamrolled by the COVID-19 pandemic.

How is the economy doing?

Stocks should be a long-term financial investment, so it makes sense to frame the valuation issue in a context that factors in the long-term economic outlook. The long-term prospects for the (US) economy were already uninspiring prior to the onset of the coronavirus crisis and look even worse today. The two long-term growth drivers – demographics and productivity – have been pointing downward for quite some time now. An aging population reduces economic growth potential both directly (by slowing the expansion of the workforce) and indirectly (rising healthcare costs, deteriorating public finances and higher taxes). Productivity is more difficult to measure and forecast. Nonetheless, deglobalization, muted investment in new capital goods and increasing state interference in economic life give reason to expect only moderately positive growth rates in the best case here as well.

Is the equity market overvalued?

This seemingly simple question actually isn’t all that easy to answer because there is a wide spectrum of The bottom line for investment strategy methods and metrics for valuing stocks. If we look at There are plenty of approaches to explaining the “classic” metrics based on corporate earnings – such as strength of the equity market in spite of the dimmed the price-to-earnings ratio, for example –, they current- economic prospects. Explanation number one is the US ly indicate that the equity market is on the “expensive” Federal Reserve’s ultra-accommodative monetary poliside. But even when the classic valuation ratios are cy, which is prompting investors to increasingly take on adjusted to strip out the extraordinary performance more risk in their investments. Combine this with the of the technology sector, the market is still “priceyish”. recent burst of technology-sector euphoria, which at However, the equity market looks far more attractive least in some subsegments is reminiscent of the tech when one compares the dividend or earnings yields of bubble seen at the turn of the millennium. What’s stocks with the meager yields that bonds currently offer. missing from this explanation list, though, is a robust The argument from this perspective is TINA, the acro- economy to justify the current valuation levels. In any nym for “there is no alternative.” case, given the outlook described above, it appears implausible that corporate earnings will grow fast enough in the years ahead to lower stock valuations to more Equity market vs. economy | A certain correlation moderate levels. Altogether, we can conclude that the Gross domestic product and equity-market return equity market indeed appears to have decoupled from the economy to some degree. This divergence could % % REAL GDP* (LS) REAL** S&P 500 TOTAL RETURN* (RS) persist for a long time, true to the adage that “the mar25 5 ket can stay irrational longer than you can stay solvent.”

20 The challenge will be to adjust our currently still con4 structive stance on stocks with the right timing and to 15 3 jump off the bandwagon at the right moment. In the 10 meantime, good portfolio diversification remains a core 2 5 element of our investment strategy and provides pro1 tection against inevitable market volatility.

0 2020

1985

1990

1995

2000

2005

2010

*5-YEAR GROWTH RATES **DEFLATED BY NONFINANCIAL CORPORATE PRICE DEFLATOR

Sources: BCA Research, Kaiser Partner Privatbank 10

Monthly Market Monitor - October 2020 | Kaiser Partner Privatbank AG

2015

2020

ESG- Sustainability Corner Investing impactfully with a clear conscience

Wide spectrum of sustainability Sustainability investing is a growth market, but it’s also a dense jungle with an arcane array of different investment approaches. The oldest form of sustainable investing is to simply exclude securities issued by corporations or countries whose operations violate traditional ethical values (e.g. products/services related to alcohol, gambling, weapons) or standards and norms (e.g. human rights and environmental protection).

Whereas the focus here is on screening for negative criteria, the best-in-class approach emphasizes screening for positive criteria, shrinking the investment universe to include only those companies that are leaders in doing business sustainably by incorporating ESG factors in their operations. Under the best-in-class approach, companies in ecologically or ethically questionable industries can nonetheless also end up in an investment portfolio – the sole determinant is their ESG rating relative to the relevant peer group in the same sector.

A somewhat more complex approach to sustainability investing is to integrate ESG criteria, a method by which sustainability scores get incorporated into the investment process already in the financial and valuation models used to analyze companies and in the subsequent portfolio construction stage. The sustainable investment spectrum also includes thematic investments, which often target a specific (environmental) investment theme (e.g. water).

Investing with an impact A probing look at the vast range of investments labeled “sustainable” reveals that not everything that claims to be sustainable actually is and that sometimes so-called “sustainable investments” contain no elements of sustainability at all. The partially uncontrolled proliferation of sustainable investment products also opens the door for disreputable vendors to engage in greenwashing, the act of simply stamping a “green” seal of quality on a standard product to improve its salability. Private investors who wish to invest their assets sustainably often have more than just a sustainability label in mind for their financial investments. Most of them, in fact, would like their investments to exert a beneficial impact on society and the world. That’s also the reason why impact investing is a particularly fast-growing sustainability investment category, expanding more than 200% last year, according to a study by the Swiss Sustainable Finance (SSF) association.

Kaiser Partner Privatbank AG is striving to meet the demand for an impactful sustainable investment portfolio while staying mindful of the classic conflict of objectives inherent to asset investments (return, risk, liquidity). The UN’s 17 sustainable development goals (SDGs), such as high-quality education, gender equality, clean water and the elimination of poverty, guide our selection of thematic areas in which investors can exert a positive impact. We make 11 of those 17 SDGs investable in our Impact Portfolio. An interested investor can specifically choose up to four sustainable development goals that he or she would like to support in the spirit of doing good. For each chosen SDG, Kaiser Partner Privatbank AG selects an appropriate portfolio building block consisting of ten companies that make an active contribution to achieving the SDG and are thus aligned with it. The resulting equity baskets are treated as satellites in the Impact Portfolio and are combined with a core portfolio to obtain appropriate diversification across sectors and regions. And to resolve the classic conflict of objectives between return, risk and liquidity as ideally as possible, the stocks are analyzed on the basis of a wide, varied array of financial factors. The sustainability reporting by Kaiser Partner Privatbank AG rounds out this impact approach and makes its results and outcomes measurable. This methodology enables interested investors to measurably maximize their impact without having to make any sacrifices with regard to return, risk or liquidity.

Sustainability investing is a hot topic these days and is enjoying increasing popularity, but there is a wide spectrum of sustainable investment options, and not all of them result in a balanced portfolio. Kaiser Partner Privatbank AG has developed a concept that combines classic portfolio theory with the ESG approach and at the same time generates a positive impact.

Sustainable Development Goals | Diverse and ambitious The United Nations Organization’s 17 sustainable development goals

Sources: United Nations Development Program, Kaiser Partner Privatbank

Kaiser Partner Privatbank AG | Monthly Market Monitor - October 2020

11

The Back Page Asset classes & agenda

Performance as of 30 September 2020 Asset class

year-to-date

Cash

1 month

1 year

3 years

0

Cash CHF

-0.5%

-0.1%

-0.6%

-2.1%

Cash EUR

-0.3%

0.0%

-0.4%

-1.1%

0.0%

1.1%

5.8%

Cash USD

0.6%

Fixed Income

0

Sovereign bonds

4.8%

Corporate bonds

5.9%

Microfinance

1.2%

Inflation-linked bonds

7.9%

High-yield bonds

-1.1%

Emerging markets bonds

-0.3%

Insurance-linked bonds

5.2%

Convertible bonds Equities

16.9%

1.0%

Switzerland

-2.1%

Europe

-12.2% -21.5%

USA

6.8%

Emerging markets

-2.9%

Alternative assets Commodities

-12.4% 24.3% 2.3%

Real estate Switerzland

1.6%

Hedge funds

15.5%

0.2%

2.2%

10.3%

0.4%

5.1%

20.0%

-1.2%

1.6%

11.8%

-2.0%

1.8%

11.0%

1.0%

6.3%

17.3%

-2.0%

24.5%

34.0%

-2.9%

8.5%

25.4%

0.5%

2.3%

19.9%

-1.8%

-7.8%

-4.4%

-1.6%

-19.8%

-12.7%

-3.8%

16.4%

41.3%

-1.8%

8.1%

0.0% -16.1%

-3.4%

-8.9%

-4.2%

28.1%

47.4%

3.5%

8.2%

19.6%

-0.2%

4.2%

4.5%

-1.8%

7.5%

-0.8%

0.1%

-0.7%

-5.6%

-3.4%

5.1%

-3.6%

0

Currencies

4.5%

EUR/USD -0.6% -2.5%

GBP/USD

11.5%

7.7%

0

Gold

CHF/USD

3.2%

0

Global

UK

0.7% -0.8%

On our Agenda October 10: World Mental Health Day The COVID-19 pandemic has radically altered our everyday lives and has brought many new challenges. The need for psychosocial support will increase considerably in the years ahead. The goal of this year’s World Mental Health Day campaign is thus to boost investment in this area.

October 19 to 22: EU Green Week Species diversity is dwindling at an unprecedented pace. The EU Green Week devoted to the subject of nature and biodiversity will call attention to the role that biodiversity can play in bolstering and stimulating a post-pandemic economic expansion by creating jobs and fostering sustainable growth.

November 3: US presidential election The prizefight between Donald Trump and Joe Biden will (finally) be over in November, but it can’t be said for sure yet that uncertainty will likewise be over after election day. A weeks-long deadlock in which the election result is contested and votes have to be recounted cannot be ruled out.

12

Monthly Market Monitor - October 2020 | Kaiser Partner Privatbank AG

Kaiser Partner Privatbank AG | Monthly Market Monitor - October 2020

13

This document constitutes neither a financial analysis nor an advertisement. It is intended solely for informational purposes. None of the information contained herein constitutes a solicitation or recommendation by Kaiser Partner Privatbank AG to purchase or sell a financial instrument or to take any other actions regarding any financial instruments. Furthermore, the information contained herein does not constitute investment advice. Any references in this document to past performance are no guarantee of a positive future performance. Kaiser Partner Privatbank AG assumes no liability for the completeness, correctness or currentness of the information contained herein or for any losses or damages arising from any actions taken on the basis of the information in this document. All contents of this document are protected by intellectual property law, particularly by copyright law. The reprinting or reproduction of all or any parts of this document in any way or form for public or commercial purposes is expressly prohibited unless prior written consent has been explicitly granted by Kaiser Partner Privatbank AG. 14

Monthly Market Monitor - October 2020 | Kaiser Partner Privatbank AG

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