Asian equity markets were mixed overnight; 9 down, 7 up. Europe's hanging in there; 13 of the markets we track are higher, 6 are trading lower as I type. The U.S.'s major averages are struggling one hour into today's session: Dow (despite Nike) down 38 points (0.14%), S&P 500 down -0.53%, Nasdaq down -0.85%, Russell 2000 down -1.08%.
The VIX (SP500 implied volatility) is up 0.93%. VXN (Nasdaq vol) is down -0.26%.
Oil futures are up 0.23%, gold's down -1.80%, silver's getting creamed -5.18%, copper futures are down -2.44% and the ag complex is actually up 0.27%.
The 10-year treasury is down a bit (yield up) and the dollar, to the detriment of the commodities' space (save for ag this morning) and, ultimately, equities as well, is building on its recent rally, up 0.31% so far this morning.
Our core portfolio, being somewhat dollar sensitive is off 0.47%. Interestingly, banks lead our exposures, +1.14%, which suggests that, aside from the dollar headwind, and evidenced by the bond action, there's some fear of rising rates out there this morning. Our other gainers so far are industrials, Asia-Pac equities, ag commodities, financials and healthcare. Our losers are led by silver, base metals, gold, energy and emerging markets (all tough plays against a strong dollar).
I gave you much to chew on in this morning's release of our weekly message, so I'll leave it here with this from Lee, Lee and Coldiron's thought-provoking book The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis::
"...the narrowing of global interest rates since 2008 is likely to have increased pressure to apply more leverage to currency carry trades."
Translation: Central banks have irresponsibly in our view inspired the riskiest sort of "investment" activity among major actors (make no mistake, "more leverage" has been applied to virtually all manner of trades); hence they've backed themselves into a corner that society's aversion to pain demands, they believe, that they attempt to bail their way out of...Have a great day!