(Chicago)

REITs are in an interesting position right now given the downward rate environment. One on the one hand, that makes them look better, but given that rates are being driven by economic fears, it might not be good after all. However, one area of REITs looks pretty attractive—mall REITS. Yes, that might sound insane given the state of brick and mortar retail, but that is exactly the point. Expectations are so low, that the bar for prices to rise is quite low.

FINSUM: “A” malls, or REITs with top producing properties seem to the best bet, as they are better capitalized to upgrade their stores and have the most resilient locations.

(New York)

UBS just went on the record warning of a potential bursting bubble in equity markets. The bank’s CEO says that global coordinated central bank easing posed a threat to markets and risked inflating a bubble. “I’d be very, very careful about growing further the balance sheet of central banks”, said CEO Sergio Ermotti. He further explained that current market prices were out of sync with investor sentiment, posing a risk. However, he did say that clients were ready to buy the dips in the market, which was an encouraging sign.

FINSUM: The equity markets remind us a bit of US politics at the moment. There are a lot of people in the middle without a lot of conviction, but those on the sharper ends are driving the whole thing forward.

(New York)

Barron’s has published an interesting article which argues that there are ten asset bubbles waiting to pop in markets. According to an analyst cited in the publication, further coordinated global central bank easing is likely to exacerbate these bubbles and turn a “run-of-the-mill recession into a full blown financial crisis”. The ten asset bubbles cited are in the following asset classes: US government debt, US corporate debt, US leveraged loans, European debt, Bank of Japan Balance sheet and related equity holdings, unprofitable IPOs, crypto and cannabis, growth and momentum stocks, software and cloud stocks, ETFs (especially fixed income).

FINSUM: So the whole world is in a bubble except the asset class that most people pay the most attention to—US stocks. The thing about many of these “bubbles” is that the economy is still plenty healthy to cover them (such as companies’ ability to cover interest etc).

(Washington)

The Democrats are finally getting their time with Robert Mueller this week. Mueller is set to testify for a full five hours before the House Judiciary Committee and House Intelligence Committee on Wednesday. Democrats are seen as likely to push him to give further details on his investigation, especially into obstruction of justice claims, while Republicans are expected to probe him on bias within the FBI.

FINSUM: Everyone seems to agree—it is hard to imagine anything happening at these hearings that would change anyone’s mind.

(New York)

Gold has been stuck in a bear market for a long time. However, it is getting close to completely breaking out of its funk, as the yellow metal is at a 6-year high. Gold is being driven by worries over the economy, falling yields, and a potentially weaker Dollar, as well as geopolitical fears. UBS summed up gold’s position this way, saying “[Due to the] declining cost of holding gold as rates remain low or continue to fall, gold’s appeal as a diversifier and alternative asset amid the current macro environment is increasing”.

FINSUM: Our only worry about gold is if rate cuts cause a risk-on move by investors that will leave gold in the dust.