ASX pukes gold, gobbles banks!

The Aussie dollar is still plodding:

Bonds too:

But XJO is flying:

With Big Iron:

Big Gas:

Big Gold puked:

Big Banks are unstoppable:

Big Tech not so much:

More classic value rotation. There is no yield curve steepening to drive it but it’s happening anyway on the expectation of it driven by vaccines.

My own outlook is the vaccine boom is real and it will combine with catch-up growth beyond Q1 next year. But it will be short. A bit like the 2016 rush as the world surged out of the China accident, DXY plunged and a pulse on inventory rebuilding lifted EMs and Europe. That makes me wonder why gold is still selling given a key input is a weak DXY.

At some point later in 2021, it’ll run out of steam as higher yields actually arrive and fiscal authorities tighten too fast. Then factor rotation will reverse as well, barring Biden winning Georgia and getting access to untold stimulus.

But for now it’s party time!

David Llewellyn-Smith
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