Monday, March 02, 2020


Dear Reader,


Please find below our latest Weekly Trend Update Report covering major asset classes and currencies.

Have a nice week.


Marc Bentin

Bentinpartner GmbH


Friday’s Snapshot


Global Chartbook PDF




FX Overlay Model



Global Tactical Model




Trend Following




Trend Status Update


US stocks suffered their fastest correction since 2008 in what was an agonizing week of deleveraging spanning across most classes on fears that surging cases of contagion from Eastern Europe to Italy to the Middle East, Latin America and most recently the US (confirmed cases worldwide passed 88,229; deaths top 2,997) meant that the new coronavirus epidemic is turning into a global pandemic. This suggested we may be in the throes of something unique with considerable economic and financial ramifications. Switzerland announced on Friday it was cancelling the Geneva car show, the Basel carnival, postponing Basel World and numerous concerts including all public gatherings of more than 1’000 people in an effort to keep trace of the virus origination and slow down the contamination. France announced a similar decision on Saturday for gatherings exceeding 5’000, decided to shut some schools and closed the Louvre Museum.

The economic impact will be considerable although hard to gauge but a growing number of analysts now consider the growing likelihood that the world economy will fall into recession this year, bowing under the nourished fire of a heavy supply (disrupted supply chains) and demand (stalling tourism and discretionary spending) shock. Equity and credit markets were sent into disarray, still leaving investors with the hope that central banks will come to the rescue to deliver more of the same posology of lower rates and more asset monetisation. It is difficult to imagine how effective these measures will be to resuscitate investment bubbles that were punctuated by a melt up phase that was itself caused by excessive easing delivered at a time when it was not necessary. More of the same is still forthcoming with up to three rate cuts now expected by the Federal Reserve for the rest of the year. A first move will likely happen inter-meeting or at the next Fed March 18th FOMC gathering (Goldman now expects a 50bps cut this month). ECB President Christine Lagarde cautioned on Thursday that additional measures were not necessary just yet, implicitly admitting that there is not much else she can do beyond calling for coordinated fiscal easing. There were some early signs on Wednesday that Germany was getting ready to open the purse strings. D. Trump called for a press conference on Wednesday in an effort to prop up markets but his incantations fell flat as did his doubts about the spreading of the virus on US soil coupled to his intimate conviction that a vaccine will soon be found. Both expectations and hope ran against the opinion of the CDC cautioning the former could likely still happen and the latter not before a year or a year and a half. Equity markets fell globally into “correction” mode (the step before a bear market) will all major indices and sectors dropping by 10+%. Credit spreads widened across the board, especially the worse High Yield segment which saw its risk premium widen faster than US Treasuries could rally. 10 Year Treasury yields dropped 32bps to an all-time low of 1.15% while HY spreads widened 141bps, causing the global credit machine (UD2.6trn international bond market) to grind to a halt. Surprisingly perhaps and even as EM currencies suffered, the dollar index failed to capitalize on this risk off week and it was funding currencies that rallied the most starting with JPY, CHF but also EUR as traders were forced out to deleverage on carry trades. Gold dropped sharply on Friday as traders hurried to sell winners and cover losses elsewhere, purging some of the excess positions. Although more volatility is warranted over the near term, it should not take too long for precious metals to reassert themselves as the most natural safe haven when policy rates and so called risk free bond yields all converge to 0 while  central banks roll over additional rate cuts and boost QE with governments likely to spend more including possibly with a broader adoption of MMT (Modern Monetary Theory). If history is any guide, gold has more leeway on the up than downside in our view. Speculators may have been long and too long but typical investment portfolios have rarely 5% invested in precious metals and this is likely change, in our view.


Last week, the S&P500 sold off by -11,2% (-8,0% YTD, Z-score -2,4) while the Nasdaq100 sold off by -10,6% (-3,2% YTD, Z-score -2,2). The US small cap index sold off by -12,4% (-11,7% YTD, Z-score -2,6).

CBOE Volatility Index rallied 134,8% (191,1% YTD, Z-score 2,6) to 40,11.

The Eurostoxx50 sold off by -12,7% (-11,0%, Z-score -2,8), underperforming the S&P500 by-1,6%.

Diversified EM equities (VWO) sold off by -6,2% (-8,9%, Z-score -2,1), outperforming the S&P500 by 4,9%. India’s growth expanded at 4.7% in Q4, the slowest pace of growth in 6 years.


The Dollar DXY Index (UUP) measuring the USD performance vs. other G7 currencies dropped -1,1% (2,2%) while the MSCI EM currency index (measuring the performance of EM currencies vs. the USD) dropped -0,6% (-2,6%).


10Y US Treasuries rallied -32bps (-77bps, Z-score -2,6) to 1,15%. 10Y Bunds dropped -18bps (-42bps, Z-score -2,7) to -0,61%. 10Y Italian BTPs underperformed rising 19bps (-31bps, Z-score 2,8) to 1,10%.

US High Yield (HY) Average Spread over Treasuries climbed 141bps (164bps, Z-score 2,9) to 5,00%. US Investment Grade Average OAS climbed 26bps (35bps, Z-score 3,0) to 1,36%.

In European credit markets, EUR 5Y Senior Financial Spread climbed 26bps (23bps, Z-score 3,1) to 0,74%.


Gold sold off by -3,5% (4,5%) while Silver sold off by -9,9% (-6,7%, Z-score -2,8). Major Gold Mines (GDX) sold off by -14,5% (-10,5%, Z-score -2,4).

Gold revised its Gold forecast higher to USD1800, citing global risk aversion.


Goldman Sachs Commodity Index sold off by -10,5% (-18,5%, Z-score -2,7). WTI Crude sold off by -16,1% (-26,7%, Z-score -2,8)


Over the week end…


Federal Reserve Chairman Jerome Powell said on Friday that the US central bank is prepared to cut interest rates while former Fed Chair Yellen took issue with MMT saying at an Asian investors’ conference hosted by Credit Suisse in Hong Kong. “That’s a very wrong-minded theory because that’s how you get hyper-inflation.” She also said that yield-curve inversion happens very easily and doesn’t alone signal a US recession is imminent, though it can signal that Fed might at some point need to cut interest rates.


Infections in Italy jumped 50% in a day, a dozen new cases were reported in the U.K. and the first infections broke out in the German financial capital.


Acting White House Chief of Staff Mick Mulvaney said school closings in the U.S. are likely. 


China’s February manufacturing activity gauge plunged to its lowest level on record over the week end.


Australia is all-but certain to cut rates Tuesday, according to Bloomberg.


J. Biden won a South Carolina primary over the week end, boosting his campaign ahead of a likely decisive “super Tuesday”. At the same time P. Buttigieg chose to drop out of the race.


Trend Score Card



Most Asset classes saw their trend signalling reverse last week, leading most sectors to return to neutral gear.



Click here for technical annotations.



Trend Scorecard   



US & International Equities

Check out US and International Stocks’ Technical Trend Status.





Sector Trend & Momentum

Check equity sectors’ trend and performance …and when they break out!


Sector Analysis   



Fixed Income

Check out 10Y US Treasury and Bund yields, their trend, expected Fed rate moves and speculative positioning in 10-year Treasury Futures.


Fixed Income



US Recession Risk Radar

A comprehensive list of economic indicators to compare the current situation with previous recessions.


US Recession Risk Radar



The Dollar

Check out where the Dollar stands Trendwise and Breakoutwise vs. G7 and EM counterparts.


The Dollar



Precious Metals

Check out where precious metals stand Trendwise and Breakoutwise. Get a sense of options (cumulative open interests on calls and puts) and futures traders’ sentiment (non-commercials open positions).


Precious Metals


Check out how precious metals, the dollar and the Stock market correlate with each other and speculative futures positioning on Gold and the Dollar.


Gold vs. USD vs. SPX



Why Trend Following Matters and How It Can Help You?


A disciplined and rule-based trend following investment approach can serve as an effective portfolio insurance technique.


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Our Portfolio Management and Advisory Services


BentinPartner GmbH is a Swiss registered independent financial adviser. We offer four different portfolio management mandates:


- The “Global Strategic” (GS) mandate invests your portfolio according to an optimized strategic benchmark. This allocation delivers the “beta” (or markets related) performance of your portfolio while we seek to generate additional “alpha” (“skills related) performance with tactical adjustments, using a predefined maximum “value at risk” envelope. Most of the portfolio’s performance is derived from the strategic Benchmark (beta).

- The “Global Tactical” (GT) mandate invests your portfolio without tracking a strategic asset allocation (or benchmark) and pursues a “total” as opposed to “relative” return objective. With this mandate, we seek to beat the best of “cash” or of the MSCI World Equity index, applying mostly tactical considerations, using a predefined maximum “value at risk” envelope and targeting not to exceed a predetermined overall portfolio volatility.

- The “Trend/Momentum” (TM) mandate, builds a diversified “All Weather” investment portfolio and applies a rule-based Trend/Momentum methodology to adjust this “trend neutral” allocation. We track trends across asset classes on a daily basis and adjust your portfolio in a semi automatic (there is always a pilot in the plane) fashion applying trend changes signals.

- The “Currency Overlay” (CO) mandate seeks to generate “alpha” applying a currency overlay with a limited leverage (not exceeding 100% of NAV). You control the portfolio allocation (which can be a pool of cash, stocks, bonds or gold) and we manage in overlay the FX exposure of your portfolio, seeking to add a total FX return of 4% to 7%.


For more information on our risk management and investment methodology, please check our web site.


We deliver transparent, professional, tailor-made, and competitive asset management services, seeking to fulfill our fiduciary duty at all times.



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© Copyright by BentinPartner llc. This communication is provided for information purposes only and for the recipient's sole use. Please do not forward it without prior authorization. It is not intended as a recommendation, an offer or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon and particular needs. This report does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation or particular needs of any person who receives this report. Accordingly, the opinions discussed in this Report may not be suitable for all investors. You should not consider any of the content in this report as legal, tax or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner llc, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner llc. The content and views expressed in this report represents the opinions of Marc Bentin and should not be construed as guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner llc believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. This Report is also not intended to be a complete statement or summary of the industries, markets or developments referred to in the Report. 


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