US election making 2020 confusing again

Mathan Somasundaram

Deep Data Analytics

Local market was completely confused and volatile before finishing almost flat for the day as US election results came through. The last two days of market optimism (i.e. 1000 DOW points) was based on data supporting a blue wave taking over all three layers of government to give policy clarity. The data since the closing of the election has flagged that on its head. Markets went red then green and then it’s just confused. Bonds, currency and commodities are moving around substantially with volatility. NASDAQ futures moved over 4% and triggered trading stops. If nothing changes after the election, then we are not going to get the stimulus package that the market is expecting to support the market multiples. USD and bonds started to move higher through the day on risk off sentiment. Short covering in futures were moving markets around like a yo-yo. We are not out of the woods yet in regards to the US election as postal/pre votes at close contests will have to be counted and may even attract legal challenges. In the meantime, pandemic does not take a break and US is going hyper mode while Europe is moving into lockdown restrictions to deal with it. Irrespective of the election, pandemic is going to deliver global growth downgrades and more money printing!!!

The latest data for the presidential and senate race from Reuters shows that Trump has more pathways to get to 270 than Biden while senate remains tight. The data will move around as more postal/pre votes are counted. Expect more volatility as market hates uncertainty!!!

Overnight the US market moved up hard for the second day in a row as markets price in blue wave. Machines are chasing the inflation trade with democratic policies. Bonds and USD lower while Gold and other commodities on the move. Russell outperforming the rest. The momentum is building out of high growth to cyclical growth. Miners are positioned perfectly for this inflation and value trade. Industrials, financials and retail the best while energy was the only negative sector.

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

Not already a Livewire member?

Sign up today to get free access to investment ideas and strategies from Australia’s leading investors.

........
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 30 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