Markets since Wed

I was away the last few days. I didn’t make any notes, but the market doesn’t seem to have done much. There are more hopes of a vaccine. $MRNA is doing well, but there seem to be multiple companies which are close.

$NFLX crashed on poor subscription numbers. It seems that people are not rushing to fill their enforced idleness with Netflix & chill after all.

Bonds have stopped moving. Yield curves are slightly upward sloping, but it seems to me that the Fed is engaged in yield curve control just like the rest.

Commods are stalled. Copper has ended it’s rally, but is not down much. Gold was down a bit, but just dragged down with all assets, risk or not, when there was an equity puke on Wed.

$IWM has rallied the strongest: it’s as if $NDX has passed the baton to the Russell. The SPX is plodding along, but it’s hard to see it winning the race.

All markets are down, year to date, with the exception of China, Taiwan, Switzerland and the US. Emerging markets look sick. Even Australia is down 11% and Nigeria and Brazil are down a stonking 33%. I sort of like Brazil, but I think that equities in general have further to fall and it’s difficult to hedge this sort of country pairs trade.

Wrap

The close seemed surprisingly quiet, given that this is an options expiry day. All the asset classes seem fairly steady. Credit seems to be experiencing dropping yields, while sovereign yields are increasing. The dollar ($DX) reversed yesterday’s rally. On many measures (e.g. trade and current balances) the dollar is in a terrible position, but it’s hard to quantify the extent to which this offsets the “exorbitant privilege” that the currency experiences as the global denominator of all prices. Even though I think that technical analysis is as useful as astrology, the chart does look as though it will continue to go down.

SEC, Jay Clayton, Francine McKenna

I listened to the TC podcast, where Francine McKenna was talking about the huge list of conflicts that Jay Clayton had when he was head of the SEC and how unsuitable he’ll be heading up the investigations at the Southern District of New York. I know nothing about the US legal system, but this didn’t sound good to me. The SEC has been supremely supine over market manipulation by Elon Musk, allegedly. I watch from the sidelines with interest.

Non-market related

This talk which is about giving a talk, it very interesting. I wish I’d heard it four decades ago.