Sunset Strip - 07th September 2020
Local market started positive and then faded to flat before a slight recovery at the close to finish positive.
US shut tonight and markets will hold for the tech bash to resume tomorrow night. It was a low turnover day with big boys taking charge with big index trades. Banks, Mining, CSL and TLS were the main positive players to keep the market in the green today. VIC extends lockdown as expected given the numbers were not low enough. Federal government complained as usual as they don’t have any real plans to drive growth. RBA keeps talking positively while being removed from reality. US is expected to attack China with more blacklisting of Chinese tech firms as China trade data shows they are doing well. Main macro event for this week is US Fed meeting and expect more money!!!
US market was volatile and finished down 160 on Friday. NASDAQ -1.3%, S&P -0.8%, Russell -0.6% and DOW -0.56%. Tech and Retail lead the falls while Financials and Industrials were the only positive sectors. US Fed expects low rates for years... thanks for that captain obvious!!! Sadly the reality is that their own inflation outlook is rising with weak USD and will start to push bond yields higher…more balance sheet needs to get burnt by US Fed to keep yields lower. Pandemic US deaths to pass 400k by Jan...remember optimistic 50k and pessimistic 100k forecasts? Labour day long weekend and likely to pop up case numbers in a few weeks. Bonds ticked lower, US$ ticked higher with Gold and Copper while Oil fell. Japan’s SoftBank supposedly bought $4b in US tech options in the last month to juice up short term returns and the counter parties were jamming the stocks higher and they may not be the only one!!! Expect more tech bash as it reverts to the norm....whatever that may be!!! Non farm payrolls were a slight beat but quarter of the jobs were short term government census worker hires...when adjusted for that, economy is fading already and will take years to recover. US shut tonight...so we will likely be weak to start the week.
Remain nimble, contrarian and cautiously pragmatic with elevated global macro risks!!! Buckle up...it’s going to get bumpy!!!
US Techs are a
massively crowded leveraged global trade and it may be starting to
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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...