United Socialism of America has started the next stage of currency debasement

Mathan Somasundaram

Deep Data Analytics

Local market started negative and then recovered to finish mainly flat on the back of Iron Ore miners. The big three miners added about 20 points to the market when Supermarkets were the only other category that was positive. It was another relatively low turnover day. US are on the way to approving a low ball stimulus package and the market is pushing gold higher as more stimulus looks inevitable. Europe is moving from pandemic mess to Brexit mess. China remains the only shining growth light. Locally the pandemic breakout is the main thematic and cases in the next few days will be key. Stupidity, greed and laziness at both government levels have put Christmas in lockdown and industries such as tourism, travel, restaurants etc will pay the price.

US market currently being priced like US high yield junk bonds. Given the biggest threat is the corporate debt, US Fed will inevitably be forced to support the bond market from selling off. Rising inflation will force US Fed to burn balance sheet to keep bond yields from rising too far too soon. Corporate debt bubble bursting or US Fed balance sheet expanding will weigh on USD and be positive for Gold…and even cryptocurrencies like Bitcoin!!!

Overnight US market was negative all day as Brexit uncertainty fed into stimulus uncertainty. European and Asian markets were mainly weak too. DOW fell all day to be down over 200 before getting jammed up in the last 30 minutes to nearly flat...but then fell back to finish down 123. It was a risk off day with bond yields and USD higher. Gold ticked lower while Oil and Copper ticked higher. Russell was the laggard and NASDAQ was better in a red day. Staples was the real positive sector while Property and Energy were the worst hit. No deal Brexit and US government shutdown risks are high while pandemic is out of control and number of US states are under pressure to lockdown. Locally the lack of policing in the north and east of Sydney means we’re likely to see over 20 cases per day for a few more...if that is more than 5 days, lockdown likely. We still don’t know where it came from. NSW has been lucky and it may have run out!!!

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

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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...

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