Massive RiskOff Move on Virus Fears; ECB Bank Lending Survey


Rates as of 0500 GMT

Market Recap

My weekly comment last week was entitled, Back to Normal. The idea was that we had had a day when the markets were in a tizzy worried about the new delta variant of the virus, but that things had calmed down and were getting back to normal.

Boy was I wrong!

Yesterdays movement can be summed up with the following graph. Peloton Interactive Inc. red line makes home gym equipment. Planet Fitness Inc. blue line is a gym chain. Same business fitness but one is for home use, the other is a public space. The former up 6.5 yesterday, the latter down 5.7.

The story is the same as I discussed yesterday fears that the delta variant is going to send the world back into lockdown. The vaccine euphoria, the hopes that the vaccine would end the pandemic and wed soon be back to normal, is fading. On the contrary, a return to normal could be much further away than people had thought, especially if the problem continues into the winter, when people in the northern hemisphere spend more time inside and the virus has more chances to spread.

To make matters worse, this new wave comes as fiscal and monetary support for the economy is being withdrawn oh and inflation is rising too! The word stagflation, which was a theme in the late 1970s, is being bantered about again a stagnant economy and inflation, an intractable combination of problems. The solution for stagnation is more fiscal and monetary stimulus, but the solution for inflation is a tighter…

EMFX Regains Composure, Stocks Fall Further on Delta Woes

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