Morning Note: "The Higher The Markets Go The......"

Bloomberg's headline credits vaccine optimism and a weak dollar for this morning's rally in stocks. 

In that the former, while great news!, was a given, I'll take the latter as the primary reason equities are up to start the session.

In Part Five of our year-end letter we explore our outlook for the dollar, in case you missed it. 

Asian equities traded mostly higher overnight, with 10 of the 16 markets we track closing in the green.

Europe's mixed this morning, with 9 of the 19 bourses we follow in the red as I type.

U.S. major averages are green across the board: Dow up 151 points (0.50%), SP500 up 0.30%, Nasdaq up 0.16%, Russell 2000 up 1.44%.

The VIX (SP500 implied volatility) is down 1.39%. VXN (Nasdaq i.v.) is up 0.86%.

Oil futures are up 1.10%, gold's up 0.25%, silver's up 0.33%, copper futures are up 0.34% and the ag complex is up 0.69%.

The 10-year treasury is down (yield up) and, again, the dollar's off 0.32% (no doubt Britain approving the Brexit trade deal [pound and euro up) is no small factor.

Led by oil services, energy, banks, materials and emerging market equities, our core portfolio (with its weak-dollar bias) is once again besting the large-cap stock averages (the Russell 2k is a smallcap index), it's up 0.66% so far this morning. 

Santiago Capital's Brent Johnson echoes our sentiment to a virtual T of late:

"The higher the markets go the more brittle they become. This is a consequence of the structural changes in the markets...the rise of passive. This does not mean markets won't continue higher. It just means "buyer beware" has rarely been more appropriate."

Again, as I've been reporting, we see pockets of opportunity in the present overall setup, but, as you know, we see risk as well...

Have a great day!
Marty