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Reduced trading activity in a Shortened Week

Expect yet another surge in cases in the weeks ahead.

The US will be celebrating Thanksgiving on Thurs and there will likely be reduced trading activity as we get closer to the mid of the week. Last Friday and Saturday were the 2 of the busiest days at US airports since the crisis began in March this year.

More than 2 million people traveling through the airports over the two days. Though that’s still only 42% of the travellers during the Fri and Sat before Thanksgiving last year, it’s still a worry given that the CDC has warned against traveling for the holiday amidst a surge in cases across the country.

Expect yet another surge in cases in the weeks ahead.


  1. Gold & Silver — Strong support for Gold is at 1850–60 and for silver, major support is at 21.80–90. Support in gold held, and price action is improving. Stay patient.

Key risks — Higher US interest rates and a stronger USD are the main risks for now. An increasingly desperate Trump is a wild card.


  • Dollar on Friday rose against major currencies such as the EUR and JPY, with traders consolidating positions amid competing forces that pull the currency in different directions: the surge in virus cases, on the one hand, and positive vaccine news, on the other. The possible resumption of U.S. stimulus talks for COVID-19 relief has also weighed on the Dollar as a safe haven. Republican and Democratic senators agreed on Thursday to revive those discussions Overall, the Dollar Index, DXY, ended the week with a slight loss (-0.39%, 92.40).
  • The S&P 500 closed at session lows with a 0.7% decline on Friday amid late-day selling in the information technology sector (-1.1%) and the mega-caps. The Nasdaq Composite declined 0.4%, and Dow Jones Industrial Average declined 0.8%. The Russell 2000 (+0.1%) eked out a marginal gain. JPMorgan forecasting negative GDP in the first quarter of 2021, and California instituting a curfew to curb the spread of the coronavirus probably weighed on risk assets.
  • Although the US Treasury recalled unused funds in the Federal Reserve’s lending programmes, Mnuchin said there are still other available facilities to support market activities and recommended that Congress re-appropriate the unused $455 billion for immediate targeted fiscal measures. In addition, JPMorgan expects the economy to rebound in the second or third quarter of next year.
  • In other news, Pfizer (PFE 36.70, +0.51, +1.4%) and BioNTech (BNTX 104.07, +9.14, +9.6%) filed an application with the FDA to receive emergency use authorization for their COVID-19 vaccine. PFE and BNTX shares closed higher.



After a scathing court setback in Pennsylvania, President Donald Trump faces increased pressure from his fellow Republicans to drop his effort to overturn the U.S. presidential election and concede to Democrat Joe Biden.

So far, attempts to thwart certification have failed in courts in Georgia, Michigan and Arizona.

For Trump to have any hope of remaining in the White House, he needs to eliminate Biden’s 81,000-vote lead in Pennsylvania. The state is due to begin certifying its results on Monday (today).

Trump’s lawyers vowed a quick appeal, but lawyers who opposed him in court say he is out of time.

“This should put the nail in the coffin on any further attempts by President Trump to use the federal courts to rewrite the outcome of the 2020 election,” said Kristen Clarke, president of the Lawyers’ Committee for Civil Rights Under Law.

Some of Trump’s fellow Republicans in Congress are now breaking ranks.


Bruce Reed, a former Biden chief of staff who is expected to take a major role in the new administration, helped negotiate with the tech industry and legislators on behalf of backers of a ballot initiative that led to the 2018 California Consumer Privacy Act. Privacy advocates see that law as a possible model for a national law.

Reed’s position on 230 could prove more controversial. In a book published last month, “Which Side of History? How Technology Is Reshaping Democracy and Our Lives,” Steyer and Reed co-authored a chapter that called 230 an enemy of children. Though 230 had allowed tech freedom to flourish, they wrote that it has now gone against the desires of its backers by giving companies a financial incentive to encourage hate and abuse.

“If they sell ads that run alongside harmful content, they should be considered complicit in the harm,” Steyer and Reed wrote. “If their algorithms promote harmful content, they should be held accountable for helping redress the harm. In the long run, the only real way to moderate content is to moderate the business model.

Thematic Context: “These days, Big Tech is synonymous with the “establishment” that the regulators are typically incentivised to resent. Breaking up Big Tech plays to the advantage of trying to stand up for the average American and standing up for small businesses regardless of how useful it is in practice. For comparison, the DoJ’s suit against Microsoft took almost 2 years, and when Microsoft was ruled as a monopoly in Nov 1999, (its shares had nearly tripled in that time) it subsequently went on to tumble 66% (from highs 59.97 to lows 20.12).” — 21st Oct 2020

“We are in a precarious spot. A largely unfavorable situation to be in is a prolonged stimulus stalemate saga coupled with pursuit by the U.S. and “allies” to break up Big Tech, the linchpin for the risk recovery from March 2020s low. Having said that, it is key to note that in recent times, there are factions within tech that are significantly outperforming the rest and these are mostly SaaS (Software As A Service) stocks that are antifragile towards lockdowns, supports the gig-economy and caters to large Millenial and Gen. Z bases that are moving away from cities and towards the suburbs. (i.e. Fiverr, Zoom, Snapchat, Pinterest etc.) We believe that granular investing within the equity space will be important for global macro traders moving forward as we gravitate towards a multi-polar world where equities in different sectors will perform differently and a polarized macro environment where economic policies will be heavily skewed towards certain sectors i.e Green Energy, Infrastructure etc.” — 29th Oct 2020


China’s Premier Li Keqiang told local governments to create more jobs, spur consumption and expand effective investment, according to a report by state-owned China National Radio.

Li made the remarks in a video meeting with local officials on Friday, according to the report.

Thematic Context: China is focused on a strategy known as “dual circulation,” under which China is seeking to drastically boost the domestic consumer market to ensure long-term sustainable growth free from foreign risks, ranging from COVID-19 to trade wars. And it also appears that recent bond index changes (FTSE Russell said it will add Chinese government bonds to its flagship World Government Bond Index from October next year. That will be China’s third entry into a major global bond index and comes at a time when investors are hunting for yield in an environment of ultra-low interest rates) are likely to drive continued increased capital flows to China that all else equal would likely help the goal of bolstering the Chinese consumer.” — 4th Nov 2020


There is not much on the agenda this week, but that doesn’t mean things will be quiet as the battle between longer-term vaccine hopes and the present lockdown reality continues to rage. The highlight on the economic calendar will be the latest PMIs, especially from the Eurozone, which will reveal how much damage the latest lockdowns have inflicted. In America, the latest Fed minutes might be viewed as outdated, so it will be all about infection numbers as more states tighten their restrictions. Finally, a Brexit deal could be imminent (again…)




Market Observation

“As government borrowing soars, vulnerabilities exposed this spring are likely to be tested again and more frequently, with even small shocks requiring heavy Fed intervention, Darrell Duffie, a Stanford University professor and outside adviser to the Fed, told MNI. The Congressional Budget Office estimates the quantity of Treasuries outstanding to jump to $24 trillion by 2023, from $20 trillion currently, before soaring to an estimated $120 trillion by 2050, Duffie said.” — 18th Nov 2020

On 15th Oct 2020, the Fed openly admitted that the UST market cannot withstand even modest stress for very long.

This means that increasingly small amounts of stress will likely be met faster with increasingly-large amounts of stimulus and/or Fed balance sheet expansion. Neoliberal economists and US government policymakers are getting the system they always wanted. Or, as former Fed governor Larry Lindsay said in a moment of honesty in 2015:

“By the way, this always ends this way — Rome, the Ming Dynasty, Zimbabwe…it’s so depressing. It always, always, always ends this way, this end game we’re all talking about…The financial arrangements of the state are no longer sustainable…it is not a pretty change if we get there, and it is a matter of political liberty because government will NOT voluntarily let itself go out of business…it will use all its powers available to government to fund itself.” -Former Fed Governor Larry Lindsay, 2015

This relentless money printing will cause paper currencies to depreciate against hard assets. This remains good for Bitcoin, Gold, Silver and Commodities.

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Phan Vee Leung
CIO & Founder, TrackRecord



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