Tuesday, April 21, 2020

Morning Note

Asian equities tanked last night, across the board. The rest of the world’s equity markets are notably in the red this morning as well. Oil continues to get trounced (June WTI contract down 27%), taking pretty much the entire commodity complex with it. Our two positions, gold (unintuitively) and silver* are seeing 0.80% and 3.52% declines respectively.

*Silver’s hit could be exacerbated this morning by a bit of profit-taking (and it does have serious industrial application that presents a headwind right here); we’re still up 12% (after this morning's drop) since we added it. We did take our position down by half on April 16th, and bought gold with the proceeds. Gold now represents 11% of our target core allocation, while silver represents 2%.

Treasuries are rallying (yields lower) and the dollar’s up virtually across the board; makes sense given the global risk-off mood this morning.

Also -- reflecting that mood -- volatility across asset classes is pretty much screaming higher this morning as well.

Volatility Indices:
Gold 28.45 +9.50%
Silver 52.15 +19.53%
Oil 394.64 +74.52%
VIX 46.61 +6.34%
VVIX 134.56 +1.90%
Treasury 7.24 +2.55%
MOVE 70.59 n/a%
DOW 47.93 +5.25%
Nasdaq 48.11 +6.02%
Russell2k 56.55 +1.25%
EFA 35.73 +8.88%
EM 42.99 +10.46%

Anything I might add this morning would be purely redundant (read latest posts). I’ll circle back a bit later...

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