FOMO changing from "Fear Of Missing Out" to "Fear Of Momentum Over"!!!
Local market followed the global markets lower as Europe moves into pandemic lockdown restrictions while US stimulus plans are pushed out to 2021 and pandemic wave is running rampant through US. History shows the damage done to health outcomes and markets in the second wave is deeper and longer than the first wave. Logically most regions are better prepared and much more aware of the pandemic issues than the first time and in Europe they are moving to restriction earlier to get on top of the problem. US election is getting close in odds and timing. Given the level of postal/early voting, results may take days to a week after the actual election. Even if the presidency does not change hands, Senate is also at risk in this election. Markets want a clear winner that will be in charge to give policy certainty in outlook. Congress will be in Democrat hands. Markets are hoping that Senate and Presidency goes to the same side. If the Republicans get both, we are in the same boat as we are now. If Democrats get both, they will have all three layers of government. Markets are happy with both of those choices at different levels. The worst case scenario for the markets is a Republican president and a Democratic Senate!!! Then we have a lame duck president for 4 years…and it will get very messy!!! Very hard to see investors taking a big positive bet with global pandemic mess and US election risk over the next week or two!!!
Aussie Gold miners are being sold on pullback in US$ Spot Gold but the A$ Spot Gold has moved higher in the last two months!!! Aussie Gold Miners are more profitable now than they were 2 months ago…buy the share price dip in the next few weeks!!!
Overnight the US market was bashed again with European markets as Germany and France leading the way back to lockdown restrictions. UK is a mess like US and they are both in denial and likely to get a lot worse before they act. DOW fell to -800 odd in the first few hours and mainly traded sideways till the last hour bashing took it down to -950 odd. NASDAQ leads the pain with Russell falling the least. Everything down except Bonds and US$. All sectors were red with Energy and Tech leading the falls. Stimulus now looks like a 2021 play and that means economic risk in Q4. Markets were ignoring economic, pandemic and election data... but I guess not anymore!!!
Remain nimble, contrarian and cautiously pragmatic with elevated global macro risks!!! Buckle up...it’s going to get bumpy!!!
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Over 25 years’ experience in the finance/tech industry. Mathan has worked extensively in all parts of the finance sector (i.e. County NatWest, Citi, LIM, Southern Cross, Bell Potter, Baillieu Holst and Blue Ocean Equities). Currently Founder and...