Equities find a slight bid
UK GDP misses
Nikkei 0.68% Dax -0.56%
UST 10Y 0.94
Asia and the EU
GBP UK GDP 1.1% vs. 1.5%
North America Open
USD Weekly jobless 8:30
USD CPI 8:30
It’s been a quiet listless session of trade in Asian and early European dealing with equities mixed and the dollar slightly lower with little fresh newsflow to move markets one way or the other.
In equity markets, the growth trade was back as Nasdaq handily outperformed the S&P with futures up by 50 basis points while the broader S&P was lower by 15 basis points. The move suggests that some of the enthusiasm for the “return to normal” sparked by positive vaccine news may be waning as traders begin to realize that it may be at least 2 quarters at the very least before a sizable chunk of the population may be immunized from COVID-19.
Meanwhile, the COVID numbers continue to rise at an alarming speed with the US now on pace to see 200K cases per day and a possible mortality rate of 2000 deaths per day. In some parts of the country, the medical infrastructure is stretched to the limit and could force officials to curtail economic activity further.
The response from the office of the current President has been non-existent and with more than 60 days to go before the transition of power the situation is very likely to get worse. It is akin to the country is seeing a wave of wildfires rage all across the land while the President forces firefighters to remain in their stations.
The response on the local level has been confused and mixed as well, as officials try to walk a thin line between public health safety and economic survival. The latest data shows that fully 80% of all COVID infections come from only four sources – cafes, gyms, bars, and churches – but without any financial support for those businesses from the government, local officials are loath to shut them down completely so the virus continues its infection path without a barrier in sight.
Little wonder then that after a brief correction the work from home trade is back in vogue as markets begin to realize that the COVID way of life may be with us well into the spring of next year.