Sunset Strip - 13th October 2020

Mathan Somasundaram

Deep Data Analytics

Local market started positive on US lead and mainly stayed there with no real sentiment. The turnover through the day suggests it was mainly global investors and nothing much from local fundies. NASDAQ was up over 2% on nothing…literally nothing new happened in the last 24 hours to get that reaction from the current stretched levels. Momentum is a beautiful dream and it usually ends as a nightmare when fundamentals are not supporting it. Globally markets are getting comfortable with Democrats leading the election but ignoring the higher corporate taxes and higher regulations. Investors are ignoring pandemic restrictions in UK and France while US covid numbers are scaring CDC. Markets are pricing in stimulus upside despite endless chatter and no deal has been the result. Investors are positive till they are not!!!

Large caps (i.e. banks) drove the market higher today while materials were the only negative sector. US futures are slightly negative. October is the most volatile month and this one hasn’t disappointed. Just feels like this volatility is just starting!!!

US market had a positive day overnight with NASDAQ leading the run with no obvious catalyst except momentum into reporting season. Reporting season should be positive due to very weak expectations but multiples are so high...that is mainly in the price. Investors are jumping into tech for growth and banks for value.... and that makes sense. But the rest should be volatile at best. Columbus Day federal holiday meant less action and very little move in bonds, currency or commodities. Trump is cleared of infection and so he is holding court in the biggest Covid risk destination of Florida. Markets are pricing in clear Democrat win but ignoring higher corporate tax and Trump challenges. The usual cycle is market underperform into election and runs after but it hasn’t underperformed...so it may not outperform after. The latest media articles point to China telling coal users to stay away from Aussie coal completely. We may see more geopolitics as US election rolls up.

Remain nimble, contrarian and cautiously pragmatic with elevated global macro risks!!! Buckle up...it’s going to get bumpy…new month/quarter has started!!!

October volatility is just starting....buckle up!!!

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.

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