Brave New World: Falling US dollar has a surprising beneficiary

Ritesh Jain, a Dalal Street veteran, trend watcher and Global Macro Investor, captures global macro investment opportunities and economic, business and financial trends with charts and commentaries in this space.

Chinese stocks touched all time high after a period of 5 years.

I think capital is flowing to emerging markets and Chinese tech stocks could be the next big beneficiary of lower US dollar.

The treasury market is now so large that the US central bank may have to continue to be involved to keep it functioning properly.

We are one step closer to permanent US Fed intervention in bond markets to maintain the stability of the markets.

This is my long-term worry on banking as a sector

Since banks would still be required to operate in a new world of CBDC, they might become better fixed income investment than equity investment.

Some type of fiscal deal (various sizes shown in chart) would help S&P 500 EPS & boost GDP growth (by 420bps at most with a $2t package) as per evercore calculations. Even a piecemeal approach would have some meaningful effects.

Philly Fed Shipment Index saw highest level since 1973. US manufacturing cycle will be on steroids through mid-2021. There is no recession in goods demand - and production is hopelessly behind after the shutdown in spring.

This “inflation” did not take long.

30-year mortgage rate in the US moves down to 2.81%, another all-time low.

This is one more way of "investing" in the new normal.

Even second hand “rolex” watches are going up in value.