In a post early in the Covid saga, we drew attention to the potential parallels with the Stamford Prison experiment, a true story of a psychological experiment that went badly wrong.

The S&P continues to grind higher, while the Shanghai Composite remains supported on its short term indicators, up 20% over the last three months. The offshore Yuan (CNY) is at its lowest (strongest) level against the US$ since March, while the trade weighted $ continues to drift steadily lower – reinforcing our view that there may be a deliberate devaluation policy coming.

August is normally the start of the quiet period in western markets with many investment managers working from home for a few weeks while the families enjoy a break from school.

In Market Thinking for July, we noted that, after one of the best ever quarterly performances for US equities, we thought that the choppy trading at the end of June signaled a changing of ownership from leveraged speculative traders to asset allocators.

Took an old favourite off the shelves…