Wrap

Finally, we had a risk off day.

All US equities were down. Rotation into value reversed. Yield curves start to tilt down. Global treasury yields go down. European equities relatively strong.

Monetary metals (i.e. Au, Ag, Cu) down. Energy up. Food up. No big changes.

No big news that I can find. Covid cases continue to rise. Maybe it’s dawning on the market that the vaccine is not a panacea and will not reverse all the self-inflicted damage overnight.

Alex Manzara

This guy is excellent. He was a guest on the Market Huddle, and kindly wrote up a summary of his comments on his blog, here. He is a very smart guy. The talk was about Eurodollar futures. These give some interesting options to get cheap exposure to rising rates at the long end. Well worth (re-)reading.

Chart for the day

All the sophisticated understanding of economics since the 1950s has not resulted in any improvement in the rate of gdp per capita in the USA. The highs generally seem to be lower, but the lows seem deeper, although fewer.