Socialism is making inflation great again

Mathan Somasundaram

Deep Data Analytics

Local market started negative on US lead and remained weak as Aussie 10 year bond yields ran past 1.40% as reflation starts to weigh on stretched market multiples. All sectors were red except for miners and energy on reflation. The market would been down double without the miners. Banks were flat but that helped to limit damage as well. The market is dealing with upgrades from reporting season not matching up to the multiple reduction from the flying bond yields. US 30 year long bond yield is now at pre pandemic level above 2%. Aussie 10 year bond yield is 1.40% after bottoming at 0.56% in the pandemic crash.

US Fed presidents are all talking about letting the yield run. Inflation likely to take off in the next few months and 10 year bond yields are going to test 2%. More stimulus and USD debasement is inevitable or the US economy tanks. Socialism is only going to make reflation worse and that is not good for markets and asset prices.

Comments on US market last close > US market was mainly flat to slight negative as bond yields fly on reflation. US 10 year near 1.30% and 30 year near 2.09% as multiple Fed presidents keep supporting the view of letting bond yields run. DOW was slightly positive with S&P flat while NASDAQ and RUSSELL were down. USD bounced and hit gold but reflation driving copper while US weather keeps oil supported. Reflation will test market multiples sooner than later as rising yields create financial stress.

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

End of day market stats are on the attached link/pdf.


........
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 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...

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