Good Tuesday A.M.,

Both equities and bonds are running today. Great for everyone. There was some economic data which was not bond friendly but the increased Covid cases, the state of California closing indoor activities, and postponing in-class schooling are having more of an impact. More states will follow California’s lead so if it is important to have a haircut or have your nails done, this is an opportunity (although that sounds a bit socially irresponsible). The 10-yr is at .62 and mortgage bonds are +20bos.  Equities started down, but some surprisingly upbeat earnings from Citi have turned that frown upside down. I hope my formatting is ok, but I have shared a tale of two markets below. Basically what the bond market sees (the smarter guys) and what the equity markets see (the more successful, but maybe less smarter guys). Anyway bonds see the danger signs months ahead, and stocks, well, they mostly see what they want to see today. The interesting thing about equities is that the tech heavy Nasdaq has performed worse this week than other indices. Regardless, Covid news still rules, so the escalating outbreaks should be harmful to stocks and helpful to bonds (that is unless there is a whisper of a phantom vaccine, then stocks buy the rumor and sell the news). Long term long equity positions are going to be painful.

Please remain safe and stay healthy, make today great!