Morning Note: Hmm...

Fear that the senate may not go with $2,000 per person stimulus checks seems to have stocks struggling to find their legs this morning. Given its broad popularity, it'll be interesting to see if senate Republicans can muster, or maintain, the political will to stand in its way.

In any event, all eyes are on the January 5th runoff elections in Georgia. A blue sweep would virtually assure that the next round of stimulus (the president-elect promises more from the get go) will satisfy popular wants. 

At first blush (and there's zero politics in this statement, only pragmatism) the market may welcome such an outcome. However, I wonder how long thereafter it would be before it begins to discount the prospects for higher taxes and, yes, higher government spending-induced inflation? 

The latter, by the way, is our base case regardless of who wins on 1/5...

Asian stocks closed mostly higher overnight, with 10 of the 16 markets we track finishing in the green.

Europe, for the second day in a row, is seeing nothing but green. All 19 of the bourses we follow are trading higher so far this morning.

U.S. major averages, on the other hand, are, on balance, leaning lower: Dow's up 8 points (0.02%), SP500's up 0.07%, Nasdaq's down 0.15%, Russell 2000's down notably, 1.72%.

The VIX (SP500 implied volatility) is up 2.26%. VXN (Nasdaq i.v.) is up 0.77%.

Oil futures are up 1.07%, gold's up 0.31%, silver's down 0.41%, copper futures are down 0.10% and the ag complex is down 0.06%.

The 10-year treasury is up (yield down) and the dollar is off a not small 0.43%.

Led by Asia-Pac equities, emerging market equities, Eurozone equities, healthcare and AT&T, our core portfolio is bucking the U.S. stock market's early-morning tide a bit, it's up 0.23% as I type.

Albert Rutherford, in his insightful book Learn to Think in Systems has us focusing on the most "crucial determinant" of a system's behavior, its function and purpose. 

"Systems thinking consists of three things: elements, interconnections, and a function (for non-living systems) or purpose (living systems). The least obvious part of the system, its function or purpose, is often the most crucial determinant of the system’s behavior."

As for market systems, contrary to hugely popular opinion  these days -- that they're there to be bolstered by policymakers and to make everyone rich -- simply put, their function is to bring buyers and sellers together and to appropriately price the risks each is taking....

Hmm...

Have a great day!
Marty