Sunset Strip 2nd September 2020
Local market backtracked the bash yesterday after deflation data from EU and solid manufacturing data from US. After the opening jostle, local market was chasing the currency with global investors taking over. US market has been grinding higher on multiple expansion with US$ worries while Asian and European markets are treading water. Market sentiment remains fickle when investor sentiment gets tested by historically high multiples and weak economic outlook.
US market started their day aimlessly into an expected solid manufacturing data before a weak inflation (i.e. deflation is more to the point) out of EU pulled EURUSD back from 1.20 and boosted US market. US and China (by being pegged to US$) are exporting deflation to the world. EU will be forced to react by money printing as usual, but it is pretty much running a hose to put out a bushfire. May be why the Big Buff moved into the Japanese Ponzi scheme sponsored by BOJ to diversify the short US$ bet!!! Australia has the same problem...A$ going up and core inflation going down...recession!!! Not real inflation…that’s 4-5% but RBA or Government do not want to talk about that. NASDAQ leads the move higher. Zoom up 41% after earnings beat as shorts were killed, Apple up on new products coming (and I through that is what they always do) and Walmart on new membership plans (and I thought everyone already did this). US$ recovered some losses from previous days but it looks like the slide path is set to continue and that weighed on commodities while bonds moved higher. Tech and Retail were the best in the US while Utilities and Energy were the worst. The three biggest stocks (CSL, CBA and BHP) that represent three main sectors were breaking important levels yesterday with the market...usually a warning shot.
Aussie economy was confirmed to be in recession today as Q2 GDP fell more than expected. Government blames pandemic but the reality is that recession was inevitable. RBA bashed rates from 1.50% to 0.75% (i.e. less than inflation) straight after the government won the election claiming “jobs and growth” agenda. AUDUSD moved up after GDP data confirmed recession after 30 years. RBA has lost control while US and China are exporting deflation and high currency around the world.
Remain nimble,
contrarian and cautiously pragmatic with elevated global macro risks!!!
Markets navigating weak economic reality with hope as the main strategy!!!
Never miss an update
Stay up to date with my content by hitting the 'follow' button below and you'll be notified every time I post a wire. Not already a Livewire member? Sign up today to get free access to investment ideas and strategies from Australia's leading investors.
pdf attached
SunsetStrip20200902.pdf
........
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.
MORE ON Equities
The quirky trend to add to your recession ready portfolio
Sara Allen,
Livewire Markets
Signs of the bottom
Ally Selby,
Livewire Markets
Rudi: The ASX ‘looks’ like a bargain hunter’s paradise
James Marlay,
Livewire Markets
1 topic
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...
Expertise
most popular
Equities
The quirky trend to add to your recession ready portfolio
Sara Allen,
Livewire Markets
Equities
Signs of the bottom
Ally Selby,
Livewire Markets
Equities
Rudi: The ASX ‘looks’ like a bargain hunter’s paradise
James Marlay,
Livewire Markets