Sunset Strip - 18th September 2020

Mathan Somasundaram

Deep Data Analytics

Local market had a slightly negative and volatile day with global investors continuing to chase the AUDUSD while local investors were mainly on the sidelines. Massive volume day as option/futures expiry at stock/index levels today.

The local market remains negative with weak economy and China uncertainties. Economic recovery since reopening has been mainly driven by taxpayer funded employment, super withdrawals and deferred rents and mortgage. We are now moving to the next phase where unemployment benefits will weaken, super spending cycle has started to fade and rent and mortgage payments will soon start again. The continues open geopolitical media warfare with China continues to weigh on weak growth sentiment as Australia is seen as US attack dog in Asia. US economic recovery showing signs of weakening with election uncertainties while Europe is starting to see substantial second wave. Emerging Markets ex China are buried in first wave and unlikely to get that under control till 2021 at best. China remains the only major economy where recovery remains robust and consumer spending remains supported. Chinese Yuan continues to strengthen against a weak and declining US$. US and China are seeing inflation and they are pushing the rest of the world into deflation. AUDUSD is going higher and USD collapse in the next few months could be shoot it out to parity!!! All our major growth engines are exporting commodities and services. High AUDUSD will make them too expensive and less competitive in a global market with lower demand. RBA hasn’t got too many bullets left and the government can’t find a reform agenda to save their lives. Debt and deficits are here for decades while most pundits keep coming back to pumping property prices as the solution. When will we stop using yesterday’s solutions for tomorrow’s world? Probably till it all goes wrong!!!

US market had another volatile down day overnight as investors digested US Fed comments to keep rates at almost nothing for atleast 3 more this point...probably longer given the track record of money printing Ponzi schemes like Japan and EU. DOW started -300 odd and then recovered to flat in an hour before fading back to the lows over the next few hours...then it remained weak before last hour pump to finish -130. NASDAQ lead the falls with weak US$. Bonds were slightly higher overnight with most commodities while Gold was lower. Market preparing for quadruple-witching tonight with stock/index options/futures expiry volatility in the US. BOE held rates and QE as it is while flagging elevated risk and considering negative rates. When everyone is crazy, you must go full metal jacket mental to get attention!!! Industrials and Energy were the only positive US sectors while Property and Retail were the worst. Growth continues to underperform value. US election risk raising geopolitics, handouts and divisions. The insiders are selling out of US markets at 5 year high levels and history suggests investors should follow!!!

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

Markets are addicted to debt fuelled stimulus without economic growth!!!

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.