Morning 1-26

 China news:

China’s unexpected withdrawal of funds from the financial system amid a warning about asset bubbles weighed on sentiment overnight, with indexes in Shanghai and Shenzhen sliding. The Hang Seng Index fell 2.6% from its highest level since June 2018, led by a 7.2% drop in Hong Kong Exchanges & Clearing Ltd. and a 6.3% plunge in Tencent Holdings Ltd. The People’s Bank of China drained about $12 billion via open-market operations on Tuesday. (Mizuho)

 U.S. and China Saber rattling in the South China Sea as both Sides Flex Military might

A PBOC official joining the Choir of Experts warning of the Risk OF Asset bubbles-Mizuho.

Virus News:

.

  • BREAKING: Results from Regeneron’s antibody drug cocktail prevented 100% of symptomatic infections and cut down asymptomatic infections by half for #COVID19. WSJ
  • California, Illinois, Massachusetts, and New York taking Steps to open back up.
  • Moderna is developing a vaccine booster shot for the coronavirus strain identified in South Africa as a precaution. The company said its Covid-19 vaccine appeared to protect against emerging variants of the coronavirus in lab tests, but as a precaution it would test whether a booster shot improves immune responses
  • UK will announce travel quarantine plan today.
  • New Zealand may keep her boarders closed all year.
  • Germany and AstraZeneca sparring again over delivery delays-BBg.

Markets:

 Is Nokia the Next game stop? Stop already has done 12 m volume in her ADR at 6:30 these games have real Consequences for Firms/ fund on the other side of the trades. We saw this yesterday when a margin call went through for firms’ short game stop, they likely have to sell what was profitable (Spoos, Nasdaq) to pay for game stop losses.

European Stocks looking past Virus worries and Italian politics (PM resigns) to press higher all 20 Stoxx 600 Sectors higher led by Chemicals (good for Dax), Financials and Autos all +2% Some positive earnings news UBS and Interroll, Shenanigans with nokia and a meager with Swedish Company EQT. Per Bloomberg “more focus on positive company updates” Dax +2%, Stoxxx 50 +1,5%Spain and Italy +1,3%…As result bunds and Buxl Lower 10-year yields throughout Europe touch higher… Earnings season picking up in pace today   3m JNJ reported this morning, MSFt and Starbucks after close, Spoos little changed, Nasdaq down a touch bitcoin -6% Oil and Nat Gas both with a small Bid, Opex for gas today

 I will be watching 2 year yields as proxy for Risk a break of .10 yield might be a sign that Confidence in Economy rebounding is fading,2s currently at .12% (H/T real vision)

News:

  • Stimulus talks bogged down a bit, Mid march now is when we may not see package till mid-March.
  • McConnell agrees to Power Share deal with Schumer.
  • Per WSJ “The auto industry’s quickening shift to electric cars is spurring investment in another emerging industry in the U.S.: manufacturing lithium-ion batteries for those vehicles. 
  • U.S. consumers are starting 2021 flush with savings, having saved $1.4 trillion in the first three quarters of 2020, or about twice as much as in the same period of the prior year, BBG

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