Benchmark Treasury yields are back within several basis points of their highest level in about 16 years. And stocks don’t like it. Early futures action on Thursday points to the S&P 500 recording a third day of losses in a row.
So, with the major asset classes deemed unattractive, the bank has come up with seven investment themes to consider for the fourth quarter of the year. Even though Barclays is not keen on equities, its third theme is that U.S. stocks will outperform the rest of the world. “[W]ith China flirting with deflation and Europe with stagnation, U.S. stocks should benefit from the ‘there is no alternative’ phenomenon,” says the bank. Also, the negative U.S earnings revision cycle has likely troughed, while those developed market more sensitive to China, such as Germany’s DAX DX:DAX, will struggle.
Markets U.S. stock-index futures ES00, -0.24% YM00, +0.09% NQ00, -0.57% are mostly lower as benchmark Treasury yields BX:TMUBMUSD10Y dip a fraction. The dollar DXY is higher, while oil prices CL.1, -0.54% fall back and gold GC00, +0.03% firms. China’s exports fell 8.8% in the year to August, though that was not as bad as the 10% contraction feared by some economists.