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Jack was there when the bull market to 30,000 started.


As the first commentator in the world, this is safe to say as it was completely in the face of all other views and market expectations at the time, to forecast the Dow Jones to 30,000 at the start of the previous decade for this year, I guess I can take some pride in this event. At the same time, I have steered us away from making the most of the rally of the past few months. My apology for this.

30,000 was even on the cover, as shown above, of my e-book published by a Wall Street firm many years ago. This is perhaps the best forecast and the most courageous at the time, in my career. I will work very hard toward doing this again and again for you.

Clifford Bennett 

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Photo: Reuters

24 November 2020

Trump makes way for Biden who will usher in a new era to be sure. He will focus on a calmer presidency to create contrast and win a second term perhaps against a resurgent Trump. A narrow congress majority and a Republican senate mean little of the Biden campaigns drastic measures, such as the tax hikes, should come to fruition. This is a major positive for the market. On foreign policy he will be firm with China, but with far more diplomacy. There will be differing points of view on this, but it is likely. For Australia, there is a very large risk here. A softer Biden line on China, even slightly, will leave Australia exposed as the most combatant nation against China in the world. Our trade is in for further reductions in exports to China to be sure. Morrison has been vote winning on China, while harming the nation's long term economic welfare. We should be making the points we are, but not in the grandstanding public statements approach of the government. There are more effective ways to operate. The USA will not immediately recover and the current post election plus vaccine euphoria is vulnerable to decay in coming months. All the best for your day, Clifford.


News and Charts Video Update

23 November 2020


US Data, Bitcoin and market action.

18 November 2020

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And the four astronauts are doing a great job.


BLACKPINK is the biggest pop band in the world.
A first for South Korea

Photo: Bloomberg

11 November 2020

The world's centre of gravity continues to shift toward Asia, in all kinds of ways. Australia needs to note it has an excellent seat at the table of the Asian economic and cultural phenomenon.

Understanding the separate cultures of Asia and not going out of our way to publicly insult our trading partners, would seem the best way to achieve desired goals and continue to prosper. Much more can be achieved by being strong in person behind closed doors in confidence, than will ever be achieved by public grandstranding insults as has been our governments approach in recent times. With consequences that were all too obvious from the very beginning.

All some in Asia can think, is where is the appreciation for having chosen to buy from us for the past two decades. If the shoe was on the other foot, we would be having the same thoughts.



16 November 2020

All the news. Applying an original perspective.

The market is holding up here. Perhaps we are entering a period of relative calm. Overall this is a stock market acting like there are no risks ahead. Even if a vaccine was a silver bullet, the US, Australian and global economies are knee capped, and the patient is only walking because of short to medium term fiscal stimulus impact. This has brought forward an over-exuberance of economic behaviour in the short term. Creating a cliff on the other side in normal circumstances, but this is an economic environment still experiencing shutdowns from the state of Washington to the UK Prime Minister. Lasting supply chain disruptions are in place. To extrapolate the recent economic bounce into a new trend is an error of significant magnitude. That is the economy. The market will believe what it wants to believe for the moment. We will pay attention to the short term price action. While remaining aware that further upside is increasingly un-sustainable and vulnerable over the medium to long term.

Covid Surges Again

11 November 2020

The lately hidden from the headlines catastrophe of covid, is quickly over-taking Europe again and in both North and South America the situation really is one of total human devastation. Strong words, but perfectly apt.

The economic impact and damage to corporate earnings from all of this is by no means over. It gets worse before it gets better is again where the US economy is, and it had not even recovered from the first wave. That stock prices are where they are is a historical form of denial. After the weakness of the past 24 hours as we favoured, expect volatility, but the dominant risk is very much to the downside for stocks. Signals have been sent to members and all the best for your day. To prosper long term we must have open eyes to the risks to the US and global economy being on-going, as well as Australia's outlook having dimmed rather significantly for several years out.

McConnell Supports Trump Who Will Run Again In 4 Years

10 November 2020

In the market, my inclination is to sell as the vaccine and Biden rallies combined have already begun to unwind. Yes, Trump is already talking about running again in four years time, while still fighting the current election result. I think this is a high probability, because his ego will allow to be fed for at least the next four years by saying the election was stolen and he will win in 2024. The show rolls on. The government department that officially calls the election result and is meant to be neutral has still not signed off on a Biden victory, This denies Biden any government support or jurisdiction. While Trump will remain for another two months, Biden needs what would usually be done within hours of the result being known. This may remain the case until any recounts and legal proceedings are concluded. A major frustration for the incoming administration. President Trump just replaced his Secretary of Defense by tweet. As I said, the show rolls on. Trump is fast destroying his legacy of good economic management. Five different defence secretaries in less than four years says everything about why he lost the election. Which in a nutshell, was covid and his own self. That McConnell is supporting Trump contesting the election is in some ways quite reasonable, but again it combines to delay the likely inevitable transition of real functioning power while the pandemic accelerates and the economy continues to falter. Speaking of a faltering economy, the outlook for stocks from these dizzying heights is not so great.

Vaccine On Way

Headline from New York Times 10 November 2020

This is a joint effort with a German firm and both had very strong days. Across the board companies, previously heavily sold, such as travel had enormous rallies. Interestingly, cracks in the technology sector continued to grow with several being sold on the day. This was one of the most dramatic price days you will ever see. It also had a lot of fuel with any potential sellers on the day, largely having already withdrawn. To see how far the post US election relief rally would travel itself. This created a further vacuum effect to the upside.

Basically, spectacular upside on dramatic very positive news, and an already existing situation of no sellers, created a one way street for most of the day.

The vaccine news was indeed surprising in its quality. Which few experts have expected would be achievable in terms of its effectiveness. That said, the company itself has stated that safety trials are continuing and more needs to be done. Nevertheless, this is great news for everyone.

In summary though, it is clear that even on the day the move was overdone. The market has given up nearly half those gains by the closing bell in New York, and closed looking quite heavy. this does not mean that was the absolute top. However, this scenario is a serious possibility. Despite all the market bullish financial news headlines today.

The point of distinction I would like to make, is that the broad market is at record highs, having already priced in more than perfect outcomes for corporate America for several years to come. This sentiment will not be the reality seen, even with a vaccine. A vaccine is great, but right now the pandemic is getting worse, even accelerating across Europe and the USA. The economic damage and lasting dislocation, particularly to the US economy will be on-going for many months and possibly for up to two years out. That corporate earnings will remain well down with their stock prices at all time record highs with extreme valuations, remains a fundamental bedrock of the US stock market that is indeed fractured.

Once everyone has bought on this news, and normal seller interest returns, the market is at risk in the medium term over the months ahead.

Getting It Right From Here

US PRESIDENT ELECT BIDEN is keen to hit the ground running, well all in preparation really, as it is a while before he moves in, gets sworn in. That will be a big event no doubt. Regardless of your feeling on the outcome, and it is always easier for the winners to talk about 'coming together', than it is for the losing side. We are about 'getting it right' here, and there will be a lot more of that. It is worth noting though, that as excited as one side may be about a new start, the other is still very much in a different mood. Which should not be ignored. The USA will have opposing forces in the Presidency and in the Senate. While, still having the most serious of issues to confront. A health and economic emergency and a still divided nation. This will not be easy. Unfortunately, it has to be pointed out the US will not be turning the corner simply with the conclusion of this election. The next stimulus package and perhaps some effort of conformity across the various states in addressing Covid, will be high on the agenda. How Biden approaches China will also be closely watched by markets. Expect a large stimulus package as perhaps the most significant guiding force to markets at this point. This will be seen as a positive, but a failure to resurrect the economy, as I expect will be seen over the following few months post such a stimulus, and any continued talk of tax hikes will combine to create profound downside for stocks. Albeit, perhaps, from a higher high than where we are now. Perhaps not. The next few days will be instructive in this regard. On the morning today, we are seeing US stock indices basically stall after the strong gains of last week. This is interesting. I think what it means is that traders are now unsure as to whether this is a positive for markets, or not after all. New York trading will be the greater bellwether. I suspect this time tomorrow we will be higher. A 1-3 days further relief rally being possible, before a potential major top. I make no apology for warning of the downside risks. They are greatly under-estimated by market sentiment in general. Should markets begin to fall away immediately, over the next 24-72 hours, then we will have indeed seen a lasting high. As it would suggest that all the buying to be done on the back of a calmer Presidency via Biden, has already been done. Creating for the moment, nothing but a sea of potential sellers. As always, we will be looking to continue to evolve the service as some long term trends may be developing themselves in particular sectors and we will talk more about this in coming days and weeks. There will be recounts in the US election and some senate run-offs, so the complexity is not resolved, but other Republican leaders will increasingly accept and recognise the Biden victory. Trump will be an increasingly isolated, yet thrashing around figure. While the rest of the Democratic and most of the Republican machines begin to move forward with the reality of President Biden.

Biden Wins

8 November, 2020

US PRESIDENT ELECT BIDEN will be giving his acceptance speech.

We correctly forecast the Trump victory, then the Coalition win in Australia, and now Biden winning by a narrow margin. Though that margin is growing.

KEY POINT: The problems of the USA do not go away overnight. Nevertheless, except a further relief rally in US stocks, followed by a slow setting in of the reality that the US economy is not coming back to its previous speed and is in fact likely to deteriorate from current levels over the next six months. None of this economic weakness is priced. As well as covid, there are the social and political disconnects that will continue to play their part in moderating economic performance.

Biden's victory is likely to be a positive in many regards, but the economic risk just went up. Of particular concern are the proposed immediate tax hikes, an over-spend on the next stimulus package and a potentially wasteful new green deal effort. As long as all of this is tempered by a Republican senate, we may see a generally moderate America moving forward.

Congratulations to Joe Biden, he certainly deserves it.

Looks Like Biden

At the moment the momentum is toward Biden in the counting of votes.

Biden is already in the lead in enough states to deliver the magic winning 270 electoral votes.

If Trump wins every state he is currently leading in, he does not win the election.

CONCLUSION: People are cautious in calling it, due to the un-precedented wild swings in the moment direction of vote counting. First Biden, then all of a sudden Trump, and now steadily moving toward Biden. And as stated above he currently has enough. It would now take a tremendous surge toward Trump in postal votes for him to regain the lead. This seems unlikely.

It does appear the US will have a new President Biden.

RAMIFICATIONS: There is no doubt he will be a more inclusive President. People will have different opinions on this, but whether positive or negative for the US, it will certainly be a steadier calmer path.

Combined with a likely large stimulus package there are economic positives. However, if he does raise taxes as he has previously indicated, this has the potential to be catastrophic for the economy and significantly set back the US in terms of global competitiveness.

A likely 'healing' and progressive US President, may in fact be quite negative for the economy, employment, and certainly corporate earnings and profits. This is a major stock price negative. Particularly as prices are already sky high and well above any sense of reasonable valuations on the outlook for the next several years. Even before tax hikes.

Biden may well prove to be a good President, but there is a real risk in terms of his economics.

Should Trump make a comeback from the current situation, there would again be relief upside in stock prices. At the moment, it may be a case of many being relieved on many issues with Biden again ahead, but deeply concerned on the economics.

Even with reasonable legal challenges, the outcome is likely to be what it is looking like right now. There may be recounts which means the outcome will not be known for as much as a week. To watch, for Biden to lose, he would have to lose his lead in Nevada and Michigan. Biden does not need to win any more states.

What The Polls Really Say

The reason Trump beat the polls last time, was not that the polls were wrong. They constantly showed an undecided vote of 22% to 28%. Which was part of why, from six months out, I constantly forecast a Trump win.

It is exactly the same this time. We falsely believe we are logical. The ultimate error in all economic mainstream thinking, When, in fact, we are an emotional creature that utilises logic, true and false, to justify the emotional position pre-chosen. In this Presidential election, there are two dominant emotions, fear of a weaker economy and fewer jobs under Biden, albeit with a medium term boost from a bigger stimulus package, and fear of covid, a leader seemingly out of control in many situations and often contentious. People judge the incumbent before addressing the alternative. Trump has done very well on the economy and equally badly on Covid. Covid is the stronger emotional issue. Also issues of race will see greater young support for Biden. Last time the surprise for everyone else, we always said Trump would win, was that he did. This time, perhaps, the biggest surprise will be that we could know the result today or tomorrow. We all know Pennsylvania, Michigan, Florida and Ohio are likely to decide the outcome. Even with the again high undecided category in polls, perhaps the emotion of covid will dominate over the economy. Which would give the election to Biden, only because he was not in power at the time and so avoided responsibility by default.

All around the world we are seeing the governments of countries that have handled covid well returned, but handling it badly could be a very different story. The high undecided means Trump can still win. Those so called battleground states however, may well have slipped on covid. It looks like Biden. It's just how we humans are.

The Presidency Impact

At last : The moment we have all been waiting for.Made ever more dramatic by the combination impact of one of the most contentious President's in history and the Pandemic. It will be close in the Senate, but I continue to favour a marginal Republican win. Who will be the next US President? I think it will be Biden narrowly. This will mean that over the next four years we see a President generally well liked, a shift toward a greater emphasis on fighting global warming, but of course avoiding the primary cause which is animal husbandry, some strengthening of covid restrictions perhaps, a big spending stimulus plan and budget in general, hopefully with a lot of focus on infrastructure, and a private sector economy that remains pretty much below par, in fact well below par as massively higher tax rates not only make it difficult for corporate profits, but also take the US off the board of global competitiveness. As a result, poverty levels will be unmoved despite strong investment, the American worker will survive this year and get by, but returning to pre covid levels of employment will remain a distant thought, the US deficit will go sky high again, and the loss of global competitiveness in most industries except technology. Basically, everything except the long term well being of the US economy will be marginally better. But, that quick combination of massive deficits and general indebtedness, with sustained high unemployment, higher taxes and loss of competitiveness... will confirm the end of the USA as the world's dominant economic power. It will be strong, but will be more in the mix with China and the EU. Maybe, even falling to third place over the next decade. Sounds dramatic, but it has been a process long in place as the rest of the pack, the world, has been constantly gaining on the leader. With the victory of either candidate, there is likely to be some form of post-election unhappiness with the result by 40% to 50% of the population. The USA has all sorts of problems, created by itself, that will not be going away tomorrow.

The RBA Show

3 November 2020

The RBA may well cut rates and institute quantitative easing, but to be frank this smacks of ego to be seen operating like other central banks and will do little, perhaps zero, to spur any further economic activity beyond the financial markets. And the financial sector is booming, so this is a lot of window dressing to a real world economy that will not change on these developments. It would be far more effective to remain on hold and not further panic businesses and consumers alike. So there may well be much financial news fanfare about this event. It will help sell papers, screen time, but really, does anyone think anyone's decisions are going to be different at 0.10% to what they are at 0.25%? This is all Ivory Tower delusionalism (new word).

Has Democracy Already Died In The USA

What is interesting about the US Elections is just how increasingly confident both sides are becoming?

The problems in the US, again brought into focus by the shooting of Walter Wallace, are across all aspects of the American society. The immediate assumption by the community that the shooting was unjustified and the mix of true demonstrations, violence and looting on a large scale, immediately came into effect. Such flare ups do have an economic impact. The ramifications include an an ever heightened and intensified polarisation nationally. This polarisation will be reaching a crescendo in the Presidential election. Both sides are increasingly certain their candidate will be triumphant. Polling has shown that 40% of voters on both sides are increasingly declaring they will not accept the victory of the opposing candidate. This means that democracy may already be dead at the community level. This is an extraordinarily dangerous situation. We all expect the US will somehow navigate a way through this period to some form of normal, post the US election. The pressures that are building at the moment however, are pointing to on-going fragmentation of the US society and economy for several years to come. 50% of US families have suffered a loss in income from covid and shutdowns. The on-going economic strain, even with another stimulus package, is far worse than in the GFC. And this is proving to be a chronic situation as cases surge. Consumers remain extremely cautious. In short, the US economy will continue to suffer post the election, regardless of who wins. To be euphoric about the victory of either side will be to badly miss the point. The USA is in serious trouble, socially, politically and economically. All at the same time.

It Still Gets Worse

30th October 2020

+The Election will be close, but still looks like Biden. +Some US hospitals are now using local fair grounds as the wave of covid cases passes full capacity. +Tech stocks record strong earnings. +US GDP growth has huge bounce in Q3. Yes, still sticking to it will get worse for the market. The stock market rebound on what we already knew would be good Tech earnings and GDP growth data, looks to have already been completed. All US Indices have fallen again from the heights of the day. The immediate situation is not about the day to day change in closing prices. It is all about these large swings and where they are eventually pointing. I believe that remains very much to the downside. Volatility will continue, but the dominant risk remains very much to the downside. All the good news for Tech and economic growth in Q3 is now out, while the economy has weakened again substantially in Q4. The rush to Tech products has likely peaked for the time being as well. We are already seeing that in the Twitter data, and this should begin to show up in other Tech stocks in Q4 earnings results. Hence the muted price bounce relative to recent days, and the close of day weakness again across the board.


US GDP rebounded strongly, but not to previous levels. It is important to note the tremendous loss of income impacting 50% of American families and the broad economic damage has not been erased The economy is down about 5% from the start of the year on this data, and does not take into account the fall back in economic activity all of the more recent data has confirmed is now taking place.

The Economic Fundamentals

29th October 2020

It is difficult to find any economic data of note on a day when the financial markets world finally woke up, looked out the window, and saw what is happening in the real world. These are the key fundamentals, major economies were already rolling back over before the current fresh virus surge to frightening levels equally in both Europe and the USA, the US society is fractured/broken, neither President will be good for the US or solve anything, global trade remains greatly dislocated, more businesses are going out of business having tried to hold on for the other side that never came, unemployment is rising, and even in Australia we are likely about to fall off yet another economic cliff. Stocks have a long way to fall to reflect the realities of the real world. Instead of the casino computer game markets of recent times.

Photo: Reuters


NY Bubble Dining

A novel solution worthy of NY. Outdoor eating remains well down on previous levels.

Australian Services Rolling Over

The Australian Industry Group Australian Performance of Services Index fell further to 36.2 in September.Our scenario of post lockdown euphoria rolling over, seems to be on track.

7th October 2020

Australian Manufacturing Vulnerable

The AIG Australian Performance of Manufacturing Index declined 2.6 points from the previous month to 46.7 in September. Australian manufacturing remains tenuous over the coming year.

Paris Bars Cafes Close Again

Unfortunately this is proving not to be something that just magically goes away, and while we will not have the total lockdowns as previously, significant economic suppression will be required at times. We are not going back to the economic activity levels that were seen pre-covid. 

US High Frequency Data

High frequency data in the US continues to show an economy running at about 80% of the previous level. This is a massive impact that continues to unfold.

US Housing Bubble is Back

US New Home Sales, like existing homes data, is pointing to a massive bubble market. As buyers rush in to take advantage of stimulus measures and Federal Reserve generosity on interest rates. New Sales are now stretching higher than pre GFC bust levels.

Australian Services PMI CBA

The Commonwealth Bank Services PMI in Australia was 50 in September. Little change from the month before. While conditions were seen as stabilising, spare capacity rose further creating downward pressure on employment still.

Australian Manufacturing PMI CBA

The Commonwealth Bank Manufacturing PMI in Australia increased to 55.5 in September. A good number as export orders rose for the first time in 8 months and factory floor life returned to less restrictive guidelines. problems remain with supply chain dislocation. Caution, could still be part of the initial euphoria thesis.

The World Is Still Not What It Was

Exceeding Expectations

RBA: Why Change.

RBA rates; "why" change, rather than 'no change' is this month's mantra. If stimulus and record low rates are not working now, doing more will make no difference. There is no way any of this can replace the Covid general loss of activity as well as far less Chinese investment,ent, spending and trade. Australia is in trouble, and there is nothing much the RBA can do about it from here.

China GDP 4.9% Q3

Slightly below market expectations, but certainly reasonable as we thought. As with the GFC, state owned enterprises and a still robust domestic sector have again seen China take the latest global crisis in its stride. Of course, the irony of this, given the origin of covid is lost on no one, That said, the loss has yet to be recovered, but China will continue to perform well. This is by no means an exa\mple of what could happen in Europe or the USA however. The rest fo the world cannot copy the strict nature of covid fighting that was in operation in China. Nor, does the rest of the world have the massive state owned enterprises to lift the aggregate data the way China can. 

19th October 2020 

US Durable Goods

New orders for US manufactured durable goods rose 1.9% month-over-month in September. This is really just an economy on idle at the moment. The renewal of homes and home offices surge has passed. The US economy is running at about 85% to 90% of what it was a year ago.
28 October 2020

US Home Prices

US S&P CoreLogic Case-Shiller 20-city Home Price Indexin the US rose 5.2 percent from a year earlier in August. The Covid surge in buying is extending, but nevertheless the market is only up 5% from a year ago with near zero interest rates. The feeling here remains that a form of housing bubble is in the making as future buying interest has been brought forward to this year, leaving a gap over the next 1-3 years.
28th October 2020

South Korea Consumer Sentiment

South Korea Consumer Sentiment increased to 91.6 points in October. This is a good recovery, but again we are seeing this pattern of recovery that is not back to previous economic levels. As this pattern evolves around the world supply chains will remain disrupted and overall global growth will remain subdued.
28th October 2020

The Chicago Fed National Activity Index

The Chicago Fed National Activity Index in the US dropped to +0.27 in September. Remember back in those strong number months, I said that it would roll over. The US is an economy in dire straights. I cannot say it any more plainly.
27th October 2020

US New Home Sales

Sales of new US single-family homes dropped 3.5 percent to a seasonally adjusted annual rate of 959 thousand in September. Rolling over and the outlook is one of a sustained broad economic downturn of greater duration than the initial covid depression.
27th October 2020

Business Climate indicator for Germany

The Ifo Business Climate indicator for Germany dropped to 92.7 in October. Not back to previous levels and rolling back over as well.
27th October 2020

New Zealand Trade Deficit

New Zealand Trade Deficit in September. Imports fell 11%. Exports fell 8%. A New Zealand and global economy in serious trouble. 
27th October 2020

China GDP 4.9%

Slightly below market expectations, but certainly reasonable as we thought. As with the GFC, state owned enterprises and a still robust domestic sector have again seen China take the latest global crisis in its stride. Of course, the irony of this, given the origin of covid is lost on no one, That said, the loss has yet to be recovered, but China will continue to perform well. This is by no means an exa\mple of what could happen in Europe or the USA however. The rest fo the world cannot copy the strict nature of covid fighting that was in operation in China. Nor, does the rest of the world have the massive state owned enterprises to lift the aggregate data the way China can. 

19th October 2020 

China Industrial Production Only Just Back

Industrial Production has taken a long time to make back the collapse of earlier in the year, at just about where it was now, but with significant loss having occurred. The numbers do look better than Main Street reality, as in the US, but nonetheless this is a true rebound.
19th October 2020

China Retail Sales Stirs Slightly

Up 3.3%, this is really the first sign of life in retail sales this year. Not a number to get too excited about, but the way back is established. The consumer has taken many more months to begin spending again, than did government authorities and state owned enterprises. The path of retail sales recovery has been a long one, and only after virtual irradiation of covid. Europe and the US are 1-2 years behind the China economy in terms of full recovery.

19th October 2020

China Fixed Asset Investment

This is still extremely low and of real concern. Again suggesting that not all sectors are enjoying a uniform recovery, particularly for small and medium sized enterprises. The private sector being far more damaged and still cautious than state operations.

19th October 2020

Both Had a Chance to Shine and Did

The headlines are along the lines that Trump had a far more brisk debate, but he experienced a far more aggressive and robust interviewer than did Biden. In a way, this gave both the opportunity to shine to their own constituents. The overall impact was in a way to present a choice between a strong, somewhat belligerent President, against a slower, more thoughtful candidate. Which both voter groups already know and endorse. In terms of swing voters, my take would be that they were both seen to be more reasonable, but with neither gaining advantage. The swing voter remains confused as to how to vote. Making the final actual debate all the more important.
16th October 2020

US Jobless Claims

US Jobless Claims fell, but still in this multiple of 5 times what they use to be area. They will decline as everyone who needs help has finished applying, but the true un-employment rate is still around 10%.
22 October 2020

Eurozone Consumer Confidence

Consumer Confidence, the main driver of the economy, deteriorates again from already horrific levels. 
22 October 2020

Germany Consumer Confidence

Consumer Confidence,even in Germany the economy is rolling over back to decline rather significantly.
22 October 2020

The polarisation of US society

The polarisation of US society continues with the farce of simultaneous speak to your own constituents televised shows.There are two powerful forces ripping at US society, the political division, unlikely to subside post election no matter who wins, and the great economic divide which is intensifying significantly as a result of covid response. The "left behind" by the economic boom is becoming ever larger. Both forces lead to lower economic performance overall for several years.
16th October 2020

US Jobless Claims Increasing Slightly

US Jobless Claims Increasing Slightly
The number of Americans filling for unemployment benefits rose by 898 thousand in the week ended October 10th. The more significant aspect is that jobless claims remain at a multiple of five above pre-covid levels. This is of extreme concern.

16th October 2020


The market continues to look the other way, from the reality of Main Street fundamentals at this point and the continued rise of Covid as a problem in both the US and Europe. People are focussed on the stimulus package, but there are more significant issues looming. Note the increasing medical recognition of this virus being un-flu like in that there are long term rolling health issues related to the brain, heart and lungs for 10% to 20% of all cases. This will lead to renewed caution by people about contact environments in the months ahead. As well as the loss of income, consumers will additionally be cautious in behaviour for many months to come.
16th October 2020


Are we seeing a stealth redevelopment of downward momentum here. The reality of the lasting impact in Asia and elsewhere, as well as the ability of this virus to come back again, is all becoming far too apparent. Meanwhile, the next US stimulus package remains elusive, while the US health system is quietly coping with a worrying acceleration in cases. The market has so far simply decided to look the other way, but the reality of the working and middle class pain through all of this will begin to dominate at some point.
15th October 2020

RBA Potential Error

The RBA has indicated it may cut rates to 0.10%. This could be harmful. The idea that anyone's economic behaviour would change on such a small shift at already extreme historically low levels, beggars belief. If anything, it would only stimulate greater consumer caution. Just when everyone is feeling a little hopeful.
15th October 2020

US Producer Prices continue to rise.

This is another suggestion that periods of higher inflation than currently anticipated, may occur sooner rather than later. This would be largely a function of supply chain disruption, but also with lower absolute sales, businesses may need to raise prices to stay operational.

Eurozone Industrial Production can only weaken.

Falling way back to just a 0.7% gain for the month of September. On a yearly basis industrial production is still down 7.2%. In the current environment we should expect the situation to remain weak. 
15th October 2020

Australian Consumer Confidence Surges Again

Australian consumer confidence managed to get out of negative, and into the positive zone. This is related to fiscal stimulus measures announced, and a kind of double whammy of Euphoria. Firstly for the rest of Australia the previous month, and now due to the low cases in Victoria suggesting lockdown will not last much longer. The risk to sentiment, is that all the excitement about coming out of lockdown will fail to manifest in the form of real business, and lead to a rolling over of this indicator akin to what we have seen elsewhere. 

14th October, 2020

Apple New 5G iPhone

This is a great phone, but Apple fans seem insatiable for massive quantum leaps for each new model. This was possible during the sharp run up in chip capability and the creation of ever more diverse features. It is no longer reasonable to expect huge leaps each year. This phone is nothing to rush out and purchase, if you already have a X or 11. Overall, I continue to see the Tech sector as vulnerable at these heightened levels.
14th October, 2020

AfterPay is cleared by Austrac

Clearly some problems that needed to be cleared up. Any bounce is unlikely to be sustained however, as this remains a company that cannot justify its already astronomical stock price. 

14th October, 2020

US Inflation continues to climb

Admittedly this is off a historically low base and still below the Federal Reserve target. That said, it is a very strong indicator of supply chain disruption. The globalisation that brought inflation under control, has been significantly impacted. Again, my feeling is globalisation flows will return, but not to the previous levels. The Fed will not raise rates simply because of even above target inflation, unless employment is strong as well. So there is zero risk of such a rates scenario any time soon. Still, we should be aware, that the next move in rates may well be to the upside. This, fortunately, is 2-3 years in the distance. Rates will stay as they are while the economy experiences a second slow down, currently just beginning, and for the next couple of years. 

14th October, 2020

UK Unemployment is increasing after coming out of lockdown. Not the other way round.

Many businesses, particularly small and medium sized businesses held on through the lockdown, banking on a return to business as usual post the virus. Finding this is not the case, it becomes increasingly difficult to maintain staff.

14th October, 2020

China Lossens Yuan Controls

Liquidity requirements of banks backing the selling of the Yuan have been reduced. This should only be seen as another small step toward an eventually relatively free floating currency. This is what I addressed, in my talk at APEC, Russia 2012, that the world would definitely move toward three equal reserve currencies over a 15 year time frame. President Putin referred to my comments in his closing speech. That I was mistaken, because there would be four reserve currencies including the Rouble. He was being jovial, and so I was able to exit the country. The point though is that this latest move by China must be seen in that long term game plan context. 

12th October 2020

US Earnings Remain Suppressed

Earnings may not be as bad as Q2, but still disastrous. Even in the Technology sector, the expectation is flat to down slightly. Which makes one wonder what the huge rally in that sector has really been about. Has it been justified. On current earnings... No. On earnings achievable over coming years, again 'no'. Our view remains, 'sell the rally'. Overall, earnings down 20% is what we have been expecting all year, and anything below 10% is a disaster. Particularly, when you consider that corporate earnings had already been flat for the year before the covid pandemic hit.

Germany Economic Sentiment

It is so important to note that this pattern is now occurring across the world. A surge in confidence and activity coming out of the first wave of the virus, followed by a more realistic falling back in economic expectations and activity. 

German Trade Surplus

Germany's trade surplus declined to EUR 12.8 billion in August. Again, clear signs of a renewed bout of economic weakness. 
9th August 2020

ECB Big Mistake

ECB officials signaled readiness to adjust all of its instruments to ensure that inflation moved towards its aim in a sustained manner, including by slashing interest rates deeper into negative territory. This is the last thing Europe needs. Further stimulus is an academic exercise with zero positive impact in the real world.
9th October 2020

Canada Business Survey Falls Sharply

Around the world economies are suddenly slowing again, and stock markets are paying no attention at all. 
8th October 2020

German Industrial Production Falls

Industrial production in Germany dropped by 0.2 percent month-over-month in August. This decline was unexpected by the market, as we continue to see economies roll over. 
8th October 2020

US Unemployment Falls but Worsens

By this, I mean that the earlier higher numbers were all about what was expected by many to be short term temporary unemployment. The current and latest number reflects long term unemployment. This is what does real economy damage, and represents true human suffering. 7.9% at this stage is a very challenging number.

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