(FLGV)

The improving macro backdrop, a strong risk rally and rising volatility leave us moderately pro-risk over coming months, with a preference for credit.

The Bureau of Labor Statistics released the August Consumer Price Index data this morning (Sept. 11).

Fear factor is still strong and in favor of gold as investors fear a second shutdown. Inflation expectations are on the rise, further boosting gold's prospects.

New hiring has now recouped nearly 50% of the total job losses that occurred during March and April. The unemployment rate shrank 1.8 percentage points in August, falling to 8.4%.

The Fed's new average inflation targeting policy is moot if inflation stays low. But if average inflation rises above the target, the central bank may find itself well behind the curve.

The ongoing COVID-19 crisis and resulting policy responses will likely make this election result more meaningful than normal.

The sudden stop to markets induced by COVID-19 caused a substantial repricing of credit risk globally, and central banks, treasuries, and ministries of finance around the world responded unequivocally...

The current bull market is by far and away one of the longest bull markets in history. Currently running 137 months and 2783 points from the March 2009 lows, it is one for the record books.

We downgrade investment grade credit to neutral and increase our overweight in high yield as we see volatility rising after a rally in risk assets.

Every asset class except Inflation and US Treasury Bills is above its long-term moving average. Waiting for higher interest rates and inflation the last 20 years has been the one, true Waiting for God...