If You Like Pina Coladas…Just a week in and already thinking of an “Escape” from this glacial, Northeast terrain? You are not alone. The good news is 2021 is quickly shaping up (unlike our decrepit physical bodies) to be anything but bland, and should continue to befall us with a number of high octane moving parts throughout the year. We’ve got gadgets and gizmos of plenty, potential melt-up risk galore. You want asset bubbles? We’ve got twenty! But who cares…no big deal…we want mooore….stimulus (Name That Tune is back on TV, fyi). Either way, today is being passed off as a pause for breath with tech bearing the brunt of the losses. There is very real potential for heavily enhanced regulation of big tech after the storming of the Capitol was planned and discussed on social media. Twitter is down 5% after banning President Trump’s personal account, citing the risk of further incitement of violence. But again, today’s move is merely a cooling off. The signs of exuberance are not fading away and as long as the Fed is engaged, why should they? Clarida's comments last week eased concerns around Fed tapering, and Brainard and Powell speaking this week are unlikely to rock the boat as well. Much is being made of yields and $ rising, but perspective is key: The UST 30-yr is still only where the 10-yr was this time last year (and most of major sovereigns are negative yielders); Equity TINA is still not at risk yet.
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