Yesterday Arnie Schwarzenegger(a Republican) issued a statement: “Mr President you are terminated.” Whether indeed the Democrats follow through with their promise to impeach Trump(again) and garner enough Republican votes to support that motion, political tensions in the USA remain high, but (so far) the world’s markets have remained calm despite that. As we begin the second full week of 2021 and the last full week before the inauguration of the President elect, it is worth looking at the key indices: WTI oil $52.73; gold $1848; EUR at $1.2220; GBP at $1.3560; 10 yr Govt bond yields: US 1.12%, Germany -0.52, UK 0.29 and Japan 0.05. With 9 days to go until the US inauguration and with US equity markets at all time highs, the market will be hoping for a smooth and quiet transfer of power. What happens subsequently and in particular with the 70,222,058 voters who supported Trump or at least the Republicans in November, is more likely to preoccupy markets after January 20.
This weekend has seen the launch of the not so catchily named but very elegantly styled ET7 electric car by Chinese manufacturer Nio. This car has unashamedly set its sights on competing with Mercedes and BMW in China and, no accident, has been announced at the same time as Elon Musk has launched a new SUV in China. With a range of over 1000 KMS between charges and a cost of Yuan 448,000 or $69,000 (including battery), the ET7 will give German manufacturers a run for their money in China-and beyond. The BMW 5 series costs the same in China. SGM-FX petrolhead Harry Clynch was last seen excitedly checking the internet to see when the ET7 will be available in Cheshunt. European markets had better get familiar with Nio and their main competitor Xpeng as one way or another, the Chinese car manufacturers are coming.
For Johnny Cash fans casting their mind back to 1964, this was the week that Ring of Fire went straight to the top of the US Country Music Billboard Chart. Johnny Cash’s music is timeless and no song sums up the memory of him better than Man in Black:
Well, you wonder why I always dress in black
Why you never see bright colors on my back
And why does my appearance seem to have a somber tone
Well, there’s a reason for the things that I have on
I wear the black for the poor and the beaten down
Living in the hopeless, hungry side of town
I wear it for the prisoner who has long paid for his crime
But is there because he’s a victim of the time
I wear the black for those who’ve never read
Or listened to the words that Jesus said
About the road to happiness through love and charity
Why, you’d think He’s talking straight to you and me
Well, we’re doing mighty fine, I do suppose
In our streak of lightning cars and fancy clothes
But just so we’re reminded of the ones who are held back
Up front there ought to be…
Discussion and Analysis by Humphrey Percy, Chairman and Founder
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