This week sets up as one of the most news-heavy, event-driven market weeks in recent memory. In the midst of one of the most important earnings seasons at its height, we also have a crucial Fed meeting/announcement, a huge jobs report due at the end of the week, and oh by the way, just the most contentious election in modern US history lined up for Tuesday (and Wednesday, Thursday, Friday, and into next week, and week after, and maybe through 2021).

The wild part to the previous statement is that the most important event was not even listed in the top paragraph. I’m sure most of you missed it given the number of events taking fold this week. That is, the escalating resurgence of Covid-19. Lockdowns have started back up now in France, Germany, and the UK as the virus apparently rampages out of control. This is going one as we aren't even into the real meat of cold & flu season yet, which begs the question of how bad this is going to get?

The US has by far the worst record of any major nation in the world in terms of management of the pandemic, with global OECD per capita worsts in cases, deaths, and annualized jobs losses (much worse than any developed country in the world). Don’t @ me, that is in per capita terms.

We now have a situation with the potential to see fiscal stimulus support stalled in the world's most economically important country, which is also where the virus is most out of control, relative to other nations, is a potentially deflationary factor that could linger in the months ahead. Yet and still, rates aren't falling at the long end, even when stocks move lower.

Though there doesn’t appear to be a federal level response in the US at present, states are starting to make moves in that direction, and we can assume (the market definitely does) more moves in the days and weeks ahead to combat the virus.

That has major implications for all major asset markets, with oil, rates, and currencies in the cross-hairs.

To counter all of this, there will be a time in the not-too-distant future (a matter of months, not years) where we will have a widely available and effective vaccine and, through increasingly effective therapeutics, a minimized case fatality rate for those who do still get the disease, and some new version of normal will reassert itself. We have to also contend as market participants with the potential for the market to look around the corner already, which is perhaps what we are seeing in the rate markets.

TECHS:

We’ve been in a range for quite some time. There is a potential that we set a double top recently in the SPX and ES and we’re hanging on to support into all these volatility catalysts.

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