Interesting that the stimulus checks have started rolling and stocks are more or less stuck in the mud to start the session. And this is despite good news on bookings from Southwest Airlines and JetBlue. Hmm…

While there’s tons left to play out of course, that law of diminishing returns — and the Weber-Fechner Law — are of course, ultimately, things. 

Also out this morning, at the top of Bloomberg’s news chain, is an article titled “Biden Eyes First Major Tax Hike Since 1993 in Next Economic Plan.”  Likely has traders’ attention…

Overnight, China — against of course super-easy year-ago comps — reported a 33.8% rise in retail sales, a 35.1% rise in industrial production and a 32.2% rise in fixed asset investment. Although that last item actually missed estimates. And China’s main equity index actually fell 2.2% overnight. Hmm…

I wonder if U.S. traders aren’t a bit jittery over this week’s Fed policy meeting. The Bank of England — unlike the ECB (Eurozone) and the RSA (Australia) — stated this morning that while they note rising rates, they don’t think they’re worth a reaction at this point. Should J. Powell sound similarly sanguine, we may see yields spike further, and stocks (tech especially) take a hit…

Asian equities were mixed overnight, with 8 of the 16 markets we track closing lower.

Europe’s green so far this morning, with 15 of 19 bourses we follow trading higher (although modestly).

U.S. major averages are mixed:Dow up 25 points (0.07%), SP500 down 0.09%, SP500 Equal Weight up 0.17%, Nasdaq 100 down 0.03%, Russell 2000 down 0.23%.

The VIX (SP500 implied volatility) is up 2.61%. VXN (Nasdaq 100 i.v.) is up 0.96%.

Oil futures are down 1.30%, gold’s up 0.33%, silver’s up 0.87%, copper futures are down 0.01% and the ag complex is down 0.35%.

The 10-year treasury is up (yield down) and the dollar is up 0.24%.

Led by MP (rare earth miner), uranium miners, silver, base metals commodities and gold miners — yet dragged by energy, banks, eurozone equities, emerging market equities and Verizon — our core mix is off 0.06% to start the day.

I stumbled across a book this weekend by John Kenneth Galbraith titled A Short History of Financial Euphoria. 

Well, look for multiple quotes from this source as we continue to manage our way through the present setup.

See if any of the extreme elements of the past year come to mind (I don’t know, maybe cryptocurrencies and “meme stocks”) as you take in the following: 

Emphasis mine….

“…built into the speculative episode is the euphoria, the mass escape from reality, that excludes any serious contemplation of the true nature of what is taking place. 

Contributing to and supporting this euphoria are two further factors little noted in our time or in past times. The first is the extreme brevity of the financial memory. In consequence, financial disaster is quickly forgotten. In further consequence, when the same or closely similar circumstances occur again, sometimes in only a few years, they are hailed by a new, often youthful, and always supremely self-confident generation as a brilliantly innovative discovery in the financial and larger economic world.

There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present. 

The second factor contributing to speculative euphoria and programmed collapse is the specious association of money and intelligence. Mention of this is not a formula for eliciting reputable applause, but, alas, it must be accepted, for acceptance is also highly useful, a major protection against personal or institutional disaster.”

Have a nice day!
Marty