Increasing covid case numbers and lack of agreement on US fiscal stimulus has markets in a risk-off mood round the world. All but two of the 16 Asian equity markets we track closed lower overnight. Europe — seeing rising covid numbers and proposing new lockdowns — is red (19 of 19 markets we track) across the board. US major averages are all off this morning as well: Dow down 162 points (-0.57%), S&P 500  down -0.76%, Nasdaq down -1.19%, Russell 2000 down -0.66%.

The VIX (SP500 volatility) is of course rallying this morning, up 7.65%. VXN (Nasdaq vol), proving prescient of late, is up 3.53%.

Oil futures are down -2.46%, gold’s flat +0.04%, silver’s down -1.07%, copper futures are up 0.81% and the ag complex is down -0.50%.

The 10-year treasury is making sense this morning, trading higher (yield lower), while the dollar is having a big morning, +0.40%.

Our core portfolio, with banks, financials and gold our only winners, Eurozone equities, tech and Asia-Pacific equities being our biggest losers, is off 0.63% as I type. 

I’ll leave you today with a quick thought on the big picture macro setup going forward.

Here’s from last week’s macro update:

“The treasury will issue debt without restraint and the Fed will purchase it likewise, indefinitely.”

“It may be that there is a simple macro fact that the Treasury market being so much larger than it was even a few years ago, much larger than it was a decade ago and now really much larger than it was even a few years ago, that the sheer volume there may have outpaced the ability of the private market infrastructure to support stress of any sort there,”