sp'daily5
VIX'daily3
Summary
US equities opened choppy, leaning on the weaker side.
Meanwhile...
Powell was issuing some grade A comedy material to the US senate, arguing the fed's balance sheet could be expected to 'gradually shrink'. This is the same guy whom prior to Aug'2019, expected the balance sheet would be brought down to (at least) $2.5trn.
As things are, the balance sheet stands at $6.934trn. The Thursday update will very likely show it breaking above $7trn. The 8s look easy, and the only issue issue is whether we settle the year in the 9s or >$10trn. In either case, Powell is either lying (I'd say no), stupid (he isn't that), or just deluded.
So, I have to deem Powell as just deluded. Further, it will only take another equity swing of -10/15% or so, and the bond market will take yields negative, and the Fed will be forced to follow.
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The afternoon saw further equity chop, but the closing hour saw distinct downside on a Corona-vaccine related headline. Volatility was itself subdued, but did pick up into the close, the VIX settling +4.2% to 30.53.
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| Air traffic is picking up.. at least a little |
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| The view from the ground, as summer is near. |
Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk
Goodnight from London
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