My view on the markets: the narrative that people are getting spooked by coronavirus makes sense. The case count going up and lockdowns in Europe makes the recovery look pretty fragile.

Price action earlier in the month made me think this September to October period would come and go without major doubts about the trajectory of global growth. But, with lockdowns going up in Europe, it looks like I called all-clear too early.

This is definitely bullish for safe asset plays - and has been great for bitcoin, interestingly. Equities are going to be interesting though because, if we go back into another rolling lockdown crouch, it only reinforces the stay-at-home outperformance narrative.

For me, the election in the US is mostly a side show. I see what's happening in Europe - with Germany considering a soft lockdown - as driving near-term volatility until the election. And then we'll see what that looks like

I posted a tweetstorm just now starting here with something from Nomura's Charlie McElligott's morning note 

https://twitter.com/edwardnh/status/1319631135673061378

The gist of Charlie's view is that the so-called post-election chaos scenario is mostly-priced in now. And both a 'Blue Wave' and post-election stimulus are priced in too. That means that the pain trade for now is actually not-bear steepening. It's bear flattening. And that comes about via a Biden/Republican Senate configuration.

I think that's right. That's also a scenario where - because of political wrangling and gridlock - you get the highest potential for economy-altering policy errors too. So, it's one with the largest embedded tail risk for risk assets. And that is certainly not priced in.

The sense I get, however, is that the longer-term pain trade is the steepener, something that can happen via inflation. And yesterday's TRVDB guest, Peter Boockvar makes that case eloquently

https://www.realvision.com/shows/daily-briefing/videos/daily-briefing-october-22-2020

I asked this on Twitter just now. So I feel like I need to ask you guys too. I feel like there's a sentiment shift underway regarding the ability for fiscal and monetary stimulus to tide us over while the US economy recovers. 

It as if the debate on Tuesday night told people: "hang on here, the US is a banana republic where gridlock is the norm and where a contested election will mean downside risk is more elevated than you thought." 

Anyone following this? Same for oil.

https://twitter.com/edwardnh/status/1311677604651507713?s=20