Morning 1-19

 Stimulus narrative today Stocks up Spoos +.71%, Nasdaq +.87% Russ +1.16%, Dollar down and treasuries lower. Incoming treasury Secretary Yellen confirmation hearing today at 9:00   European stocks sideways today, Italy’s Mib +.3% as Prime Minister Conte survives a no confidence vote in the House, A senate Vote to follow. China Reported better than forecast GDP over the weekend and this continues to give lift to Asian Stocks along with continued inflows into Emerging market ETFs, last week was the 11th consecutive week of Inflows into them, this is part of the Rotation /reflation trade.  South Korea Kospi +2.6% Taiwan +1.7%, NKy +1.4%, Hong Kong stocks at 20-month highs closed +2.7%. Speaking of reflation Iron ore 9 year highs, UBS  see a copper deficit of 469,000 Tons or 2 % for 2021  Annual Demand, a negative though comes from IEA which  has lowered its demand outlook for current quarter by 600K barrels. Be aware that China is tightening Lockdown measures due to A pop in Virus cases.

 Yellen testimony already released and Dovish of Course from IFR news “In prepared testimony for today’s testimony to the Senate Finance Committee Yellen shouted “Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big.” Clearly jump-starting an attempt at a bipartisan push for President-elect Biden’s $1.9 tn American Rescue Plan.

 From bank of America “the proportion of fund managers surveyed by Boa who said that the global economy is in an early-cycle phase, as opposed to a recession, was at its highest in 11 years. A record 19% of investors surveyed said they are currently taking more risk than normal. For the first time since October, a long position on technology companies was knocked off the top spot, as investors said that long bitcoin was the most crowded trade. A short position on the U.S. dollar was seen as the third most crowded.” But “The top tail risks to the economy were thought to be problems with the vaccine rollout (30%), the Fed easing its asset purchases (29%), and a Wall Street bubble (18%).”

Precious metals Small bid on Dollar weakness, I believe short term dollar trend is higher thus les conviction to push Metals higher on lower dollar Yields a touch a higher Bunds have a small range so far today. No Economic releases so focus on yellen hearing and Any tape Bombs from president trump.


  1. Markets rotate. The steeper US yield curve, in combination with antitrust/future M&A worries, is weighing on Big Tech. The combined index weighting of the top five companies in the S&P 500, which currently includes Apple, Microsoft, Amazon, Tesla and Facebook, has retreated to 22% from a peak of 24%, a level last seen during the bubble- Mizuho.
  2. The ICE BofA MOVE Index, a measure of implied volatility in the Treasury market, is near September’s record low.
  3. If the $1.9 trillion relief plan is passed, more than 150 million Americans would likely be eligible for a $1,400 direct payment, on top of the $600 payments approved in December. Across all income groups, December check recipients traded roughly 30% more in the first 10 days of January than they did at the start of December, data from Envestnet Yodlee show (Bloomberg). Trading among those with annual incomes of less than $75,000 who received payments jumped 53%.
  4. Merkel wants to extend lockdowns to Feb 15th.-ITC markets

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