China, Iran and Ronni’s Trip to the U.S.

Good Morning Ladies and Gentlemen

”Honi soit qui mal y pense”

The motto of the English Order of the Garter

Chinese Central Bank

On Tuesday, the Chinese financial supervisory authority provided a considerable tailwind with the announcement of several measures. For example, the minimum reserve requirements for banks are to be lowered by 50 basis points, and mortgage interest rates are also to fall. These steps are primarily aimed at stimulating slow economic growth; however, the People’s Bank of China (PBOC) also intends to use its stimulus program to stabilise the Chinese real estate sector and stock markets. The announcement of these economic stimulus measures by China’s central bank has led to a global increase in share prices.

Bank of America

According to Bank of America (BofA), solid labour market reports and PMI data could trigger a rally in stock prices. BofA believes good news is generally good for equities and that positive surprises in both data should be a tailwind for stocks. Investors will, therefore, closely monitor the non-farm payroll reports for September and October, to be released on October 4 and November 1, respectively. The big week of third-quarter earnings from October 21 to 25 could also be a significant market catalyst. However, technically, November 6, the day after the U.S. presidential election, is probably the most important day for the stock market. BofA estimates that the S&P 500 will move 2.5 per cent either way on that day. Therefore, the 6th of November 2024 will be significant for investors because, with a clear winner, markets will begin to price in future policies during the 47th president’s four-year term. The stock market experienced a similarly large move the day after the last presidential election when President Biden won; the S&P 500 rose by 2.2% on 4 November 2020.

The Swiss National Bank

The Swiss National Bank (SNB) has reduced the key interest rate from 1.25% to 1%. The tone of its announcement was unexpected, as it highlighted multiple times the decreased inflationary pressure in Switzerland. In August, the annual consumer price inflation was at 1.1%. Today, the monetary authorities stressed that Swiss inflation is expected to be significantly lower than previously thought, with a projected average inflation of just 0.6% in 2025, a significant decrease from their June forecast of 1.1%. For the first time, the SNB indicated that further interest rate cuts are likely necessary to ensure price stability in the medium term. This indicates a departure from combating inflation, as the SNB is now ready to take all necessary measures to prevent Switzerland from falling into a deflationary state.

Ronni’s Trip to the U.S.

As summer draws close each year, my partner Ronald P. Stöferle travels to the U.S. to speak at a conference and gain insights into the precious metals market. You can find his gold and gold miners analysis by following the link below. I highly recommend taking the time to look at it and gaining Ronni’s perspective. Enjoy:
https://mcusercontent.com/b268a38a165b03979d95268dd/files/151d72b7-01bb-5cc2-f8a2-fb614f7f6d57/Incrementum_2024_09_Notes_from_the_Road_EN.pdf

Interesting political development in Iran

According to the Guardian, Iranian President Massud Peseshkian recently expressed Iran’s disapproval of Russia’s actions against Ukraine, stating, “We have never supported Russian aggression against Ukraine”. Peseshkian also conveyed Iran’s readiness to resume the 2015 nuclear agreement, emphasising, “If the commitments of the agreement are implemented in full and in good faith, the dialogue can be extended to other issues,” as reported by Reuters. According to Peseshkian, Iran stands for peace and does not intend to engage in conflict. “Honi soit qui mal y pense”! Well, it almost seems Iran feels somewhat under pressure, groaning under the sanctions of the West. Anyway, if the nuclear agreement could be resumed, that would definitely be appreciated and hopefully lead to political relaxation in the entire Middle East.

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day and the weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li