Geopolitics + Pandemic + Asset Bubbles = Weak Economy + Money Printing

Mathan Somasundaram

Deep Data Analytics

Local market was negative for the third consecutive day despite positive US lead and positive China data. It was all about geopolitics and pandemic mess in the US. US pandemic is breaking records and CDC expects restrictions to come in ahead of the Christmas and New Year holidays. Geopolitics is playing in multiple layers now. Russia test new nuclear bomb. US is about to blacklist more Chinese businesses while in transition. UK is moving to remove China tech in their communication platforms. Israel is moving into Palestine regions while being implicated by Iran on the attack that killed their senior nuclear scientist. US, Israel and Saudi Arabia are trying to curb Iran ahead of transition. China is taking more steps to curb Australia. What could go wrong when you are sitting on asset bubbles around the world while economies are still stuck in recession? Don’t worry…Central Banks are about to roll out their money printers and save us all…well there is no plan B!!!

US Fed are on the path to endless money printing as USD breaks lower to new multi-year lows…as seen below. Reflation trade as USD falls and bond yields grind higher. Currency market betting on US Fed debasing USD and buying bonds. Weak USD, more money printing and lower yields should support the rebound in Gold after recent pullback on vaccine and recovery hope.

US market had a weird undecided low turnover short trading day on Friday night that delivered a positive close. NASDAQ lead with Russell close second. DOW and S&P were positive but very slightly. Tech, Health Care, Gold and Retail were the only positive sectors. Bonds higher, USD lower, Oil lower, Gold lower and Copper higher. There wasn’t much to read through today. Vaccine optimism is getting more questions as more data gets peer reviewed. Pandemic getting worse in the US with no stimulus chat. Geopolitics keeps rising globally.

Remain nimble, contrarian and cautiously pragmatic with elevated global macro risks!!! Buckle up...it’s going to get bumpy!!!

Not already a Livewire member?

Sign up today to get free access to investment ideas and strategies from Australia’s leading investors.

........
Deep Data Analytics provides this financial advice as an honest and reasonable opinion held at a point in time about an investment’s risk profile and merit and the information is provided by the Deep Data Analytics in good faith. The views of the adviser(s) do not necessarily reflect the views of the AFS Licensee. Deep Data Analytics has no obligation to update the opinion unless Deep Data Analytics is currently contracted to provide such an updated opinion. Deep Data Analytics does not warrant the accuracy of any information it sources from others. All statements as to future matters are not guaranteed to be accurate and any statements as to past performance do not represent future performance. Assessment of risk can be subjective. Portfolios of equity investments need to be well diversified and the risk appropriate for the investor. Equity investments in listed or unlisted companies yet to achieve a profit or with an equity value less than $50 million should collectively be a small component of a balanced portfolio, with smaller individual investment sizes than otherwise. Investors are responsible for their own investment decisions, unless a contract stipulates otherwise. Deep Data Analytics does not stand behind the capital value or performance of any investment. Subject to any terms implied by law and which cannot be excluded, Deep Data Analytics shall not be liable for any errors, omissions, defects or misrepresentations in the information (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the information. If any law prohibits the exclusion of such liability, Deep Data Analytics limits its liability to the re-supply of the Information, provided that such limitation is permitted by law and is fair and reasonable. Copyright © Deep Data Analytics. All rights reserved. This material is proprietary to Deep Data Analytics and may not be disclosed to third parties. Any unauthorized use, duplication or disclosure of this document is prohibited. The content has been approved for distribution by Deep Data Analytics (ABN 67 159 532 213 AFS Representative No. 1282992) which is a corporate approved representative of BR Securities (ABN 92 168 734 530 and holder of AFSL No. 456663). Deep Data Analytics is the business name of ABN 67 159 532 213.

1 topic

Mathan Somasundaram
Founder & CEO
Deep Data Analytics

Over 30 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...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment