Sunset Strip - 15th September 2020
Local market had another volatile day but this one went nowhere. Best sectors were property and tech while the worst were energy and banks. Gold has had a few good days in a row as the US Fed update gets closer.
China data was positive while Japanese new leadership is pointing further down the rabbit hole of endless money printing. Mind you, EU is already stuck in the money printing ponzi scheme while US will confirm that they are jumping into the hole by the end of the week. Aussie government has come up with another addition to failed energy policies…that’s right, government owned gas generator!!!…now that should raise energy prices even higher!!! If this wasn’t real you would laugh…sadly it is real and you should cry! After promising lower energy prices, it has continued to rise under this government despite global prices falling. RBA has almost given up and AUDUSD may be going towards 80 cents by the year end. If the US goes wild after the election, we may be looking at AUDUSD at parity!!!
US market was up overnight on M&A and vaccine hope. DOW started over 1% higher and finished 1.2% on NASDAQ stocks up 1.9% while Russell lead with +2.7%. Nvidia takeover of Arm from SoftBank allows a lot of new areas of exposure for Nvidia but also shows the problem SoftBank has got themselves into. Oracle confirms deal with ByteDance for TikTok and that’s geopolitical related. Pfizer says vaccine could be available by year end…assuming it proves to work soon! Another big pharma pushing their share price without facts…never seen that before! Even if it’s successful, the production cycle won’t cover US properly till Q2 and Australia will be Q2/Q3 assuming production gets up and running here with no issues. US Treasury secretary said don’t worry about debt, deficits and Fed balance sheet for now. Why worry? just create a mess and leave it for someone else to clean up for decades to come!!! Bonds didn’t move much while weaker US$ pushed all currencies and commodities higher except oil. Oil has problems… even weather and geopolitical risks can’t push it higher. All US sectors were up with gold, property and tech leading by a margin. US pandemic has a dozen states with rising cases going into winter and Fed update week while US$ looks to take another slide. Do you have enough gold? Probably not!!!
Remain nimble, contrarian and cautiously pragmatic with elevated global macro risks!!! Buckle up...it’s going to get bumpy!!!
Currency debasement is about to create cost inflation in the US!!!
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pdf attached
SunsetStrip20200915.pdf
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