Morning 9-21

Risk OFF!

 European Banks -5.1% As a report over the weekend indicated banks moved money for individuals or entities that they could not identify (BBG) raising the alarm for all sort of possible fraudulent activity. ING and Deutsche -7% Barclays and HSBC both down 6% US banks following the lead pre cash open. HSBC trading at lowest levels since 1995 per BBG

 Secondly  worry’s growing over a second or third surge of virus cases across Europe U.K chief scientist said “ the country is on pace for 50k cases a day unless urgent measures are taken(BBG)  this brought the conversation around to another set of Possible lockdowns’. Johnson will speak tomorrow to lay a new plan. Travel and leisure sector in Stoxx 600 -5%

Third The passing of ruth Ginsberg is increased the partisan divide in Senate this further pushes any chance of new stimulus further out of reach. Per goodjudment.com the chance of Getting stimulus del before Oct 31st is down 6% over last week and stands at just 30 %, not before Jan 31st, 2021 stands at 65% +7% over last week. The fed cannot do it all thus the pleading to members of Congress to provide more stimulus, the markets need more stimulus to move higher without it the path of least resistance likely to downside.

 Double whammy to risk comes from stronger dollar and yen, hard for stocks to move higher with both of these currencies positive on day   DXY +.35%, JPY +.4% higher for 6th consecutive day trading at highest level since March. Japan on two-day holiday watch once they return watch for Comments regarding the Strong currency as the time is approaching for some verbal intervention.

Markets:

 Dow -2%, Spoos -1.7% Nasdaq _1.6% Ugly in Europe Stoxx 50 -3.2%, FTSE and Dax -3.4% Mib -3% Outside of Italy 10-year EZ yields lower Germany -3.3.  Euro -.4% Gold -1.4%, Silver -2.6% Platinum -2% Bonds =1 handle ultra +2 handles. The liquidation in October Nat Gas continues unabated, open interest continues to decline towards zero as roll continuous  gas -3.8%today whereas Nov little change.

News:

  • US approaches 200K virus deaths
  • TRUMP WANTS FINAL VOTE ON SUPREME COURT PICK BEFORE ELECTIONS
  • “Trump approved a deal … that will allow TikTok to continue operating in the United States, a decision that comes after more than a month of geopolitical turmoil between Washington and Beijing over the future of the video-sharing app
  • Powell and Mnuchin in front of Congress on Tuesday Powell back in front of house on Wednesday
  • WSJ’s Sam Goldfarb and Paul J. Davies: “Surging deposits and declining lending are driving banks to dramatically increase their holdings of U.S. Treasury’s, offering significant support to the bond market at a time of massive government borrowing.


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