Sunset Strip - 16th October 2020

Mathan Somasundaram

Deep Data Analytics

Local market started positive with a boost from global investors buying banks for the first half of the day before the reality of the global weak economy dragged it into negative territory by the close. Tech and Retail were slightly in the positive while Property and Energy were the worst hit. The job data shows that Australia is losing jobs after three months of gains. Aussie fiscal policy and monetary policy effects are expected to be dwarfed by the US macro risks. ECB saved the markets last night by promising more stimulus to counter pandemic lockdowns but no amount of cheap debt can save small business from another layer of lockdowns and decade of money printing have not solved structural problems. How do they think it will work now? When you are loaded with debt to breaking point? Don’t let reality sow down FOMO!!! US election is favouring Democrats and that means expect just about anything from White House. We have already seen the online email attack like last cycle but that did not have much effect this time. Trump did not make up ground in the debate or Townhall chats. US stimulus will come but not till the election. US consumer spending is falling over, jobless rates are rising and mortgage delinquencies hit 20 year high!!! On the flip side, China steady recovery cycle with stimulus continues to deliver solid economy…expect trend to remain positive on Monday’s data deluge!!!

US market overnight started negative and recovered to reduce the losses after ECB delivered ready with more stimulus as pandemic bites. EU and US are in the Japan style ponzi scheme where money printing must be ongoing forever till there is a reset, crash and reform. Japan proves the case why it does not work as politicians will not do the reset, crash and reform cycle. EU is a pandemic mess again with US fast behind them. Emerging Markets ex China will be in pandemic mess for years. The second wave of recession effects likely to hit EU first and then drag US lower. ECB can’t stop it but add more debt to delay it a bit. US stimulus pre-election talk seems over but White House continues to talk it up with no negotiations. US$ and Gold were higher while Bonds were lower. EU markets were down over 2%. Job market data shows the pick-up in jobless worse than expected as economic recovery fades. Energy and Financials did the best. Reporting season not stacking up with multiples. ECB stimulus talk won’t hold markets for long. Chinese economy looking better by the day and their bonds and currency too.

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

Investors are long US and short China while data suggest long China and short US!!!


........
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