Portfolio Mix

Pfizer has spent $800 million to build the leading production platform for gene therapies, as it plans to become a fast-growing innovator. Within three years, the drug giant hopes to launch three potential cures for hemophilia and muscular dystrophy, worth as much as $4 billion in annual revenue. In addition to its rare-disease treatments, Pfizer plans to launch four products for autoimmune disorders by 2025. Two of the products would treat atopic dermatitis, which causes painful itching in up to 30 million Americans. Only a portion of those patients get any treatment today. Pfizer is eager to recast itself as a high-multiple growth stock. By yearend, its slower-selling products will be spun off into a business run by Mylan (MYL). From that point, Pfizer thinks it can boost revenue by 6% a year, despite the patent expirations of nearly $20 billion worth of its products in the latter part of this decade. The expected growth will be fired up by 25 product launches.

The $2.4 trillion proposal from Democrats has raised the hopes of a US stimulus package, even though Republicans have put a cap of $1.5 trillion on the extra spending. Anyway, the Democrat proposal spurred the market sentiments for a short while. US Treasury Secretary Steven Mnuchin also talked about the need for a targeted pandemic relief package. All of this sounds like a stimulus deal is possible. Nonetheless, a sell off looks like a strong possibility, And a new deal might just be delaying the inevitable.US Dollar index has broken out to the upside, reclaiming the 50 day simple moving average (SMA). It is worth noting that US Dollar and the equity markets have been exhibiting a strong negative correlation in the past few months. Moreover, President Donald Trump nominated Amy Coney Barrett, a conservative federal appeals court judge, to the US Supreme Court and this could escalate the political tensions again. With the elections nearby, volatility could rise as Biden continues to lead against the incumbent.

In its last week’s monetary policy meet, Swiss National Bank has clearly announced its intentions of massive intervention in the FX market should CHF rally on back of its safe haven appeal. The bank said it intends to pursue its ultra expansionary monetary policy for the foreseeable future on the back of market uncertainty & expectations of lower growth. SNB has sold more than $98bn worth of CHF in the H1 of this year, one of its most aggressive efforts in recent history to suppress its national currency. A sharp rise in CHF's value would be devastating for Switzerland’s large manufacturing and export based economy. As a percentage of GDP, exports roughly account for 65 % of the entire GDP.

Gold prices rebounded from the lows of $1848 as the King Dollar retraced from two-month highs. Improved risk sentiments on rekindled stimulus hopes seem to be weighing on the safe-haven Dollar and buoying the yellow metal. U.S. House Speaker Nancy Pelosi said she hoped for a deal with the White House this week, following talks with Treasury Secretary Steven Mnuchin. The path higher for gold will be messy and volatile, but buying the dips could make sense from a long-term point of view. Negative real rate and stimulus support from government should support the metal in the long-run. Immediate support for the metal is seen near the 100 Day MA near $1845, a break below which would open doors to $1800 zone, while bulls need to break above $1900 zone to target $1930 and $1950 levels.

Treasury yields came under pressure last week as risk-averse sentiments gripped the investors. Uncertainity over fiscal stimulus and worries over surge in coronavirus infections ahead of the flu season and f of a contested U.S. presidential election between President Donald Trump and challenger former Vice President Joe Biden have contributed to investor jitters, helping underpin demand for assets perceived as havens. With lofty equity valuations and intense election uncertainty round the corner, market volatility is expected to continue and investors have ample reasons to back up long term bonds.