The markets hope for a big earnings week from Big Tech. Will Washington spoil the fun?

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Good morning. From Tokyo to Frankfurt, the markets are mixed as a familiar brew of trade tensions, coronavirus spikes and a busy week of earnings and stimulus-bill negotiations take center stage.

Let’s check in on the action.

Markets update


  • The major Asia indexes are mixed in afternoon trade with the Shanghai Composite leading the way, up 0.3%.
  • Did HSBC help set “traps” to ensnare Huawei in a big U.S. sanctions probe? It wasn’t us, the bank firmly says, denying claims in Chinese media outlets from over the weekend.
  • It’s been a heckuva run for India’s Reliance Industries Ltd. Probably best known for its digital media unit, Jio Platforms, Reliance is also big in energy. How big? On Friday, it knocked off Exxon Mobil to become the world’s largest energy company after Saudi Aramco.


  • The European bourses are mostly down at the start with the benchmark Stoxx Europe 600 off 0.5%. Ryanair fell 2.5% at the open after the budget airline forecasted passenger traffic will plummet 60% this year.
  • The proverbial tortoise overtaking the hare… The euro zone economy, Goldman Sachs says, is expected to show a “steeper and smoother rebound…than elsewhere”—and that includes the U.S.—due to its more efficient handling of the coronavirus pandemic.
  • On cue, dark clouds are gathering on the horizon. Britain has imposed surprise quarantine measures on holiday-makers returning from Spain following a big spike in COVID cases there. The Spanish government and the airlines are furious.


  • U.S. futures look to reverse Friday’s losses. They point to modest gains at the open.
  • It’s a big week for tech. Chipmaker AMD reports quarterly results on Tuesday, followed by Facebook on Wednesday. Thursday we have Apple, Amazon and Google parent Alphabet.
  • The markets will be watching Capitol Hill closely this week as lawmakers haggle over a new coronavirus relief bill. Keeping the supplemental $600/week unemployment benefits, a popular goodie enacted in March, looks like a long shot.


  • Gold is king, up a whopping $30, putting it well over $1,900 an ounce.
  • The dollar is sputtering. Again.
  • Crude is mixed.



Gr. Pro (before) logos (just sayin’)

I’m at the bottom of Europe where down is up, and up is down. Inspired as I am by my surroundings here in Magna Graecia (Sicily, as it’s known these days), I’m trying something different with Bull Sheet today.

But first… why Sicily? 

Answer: Because no sensible person would choose to sweat it out for even a day in Rome in sultry July or August. This was true in Augustus’ day. It’s truer today. Once the triple-digit F° temps arrive, most families pack up the car and scatter to the winds, in search of a cooler place to get through the dog days of summer. We usually head South where the meals, coffee and gelato are sublime, and the locals even sweeter. There’s an additional prerequisite for me: it’s got to be a land settled and influenced by the benevolent ancient Greeks, not those war-mongering ancient Romans. By late June each year, I’ve had enough of Romans.

This year we’re just outside Licata, staying near our Sicilian friends. Where’s Licata? Take the highway 900 KM south of Rome, and just before you drive headlong into the sea, stop. You’re there. It’s an 11-hour drive that passes three distinct volcanos (Colli Albani, Vesuvius and Etna), and three seas (Tyrrhenian, Ionian and Mediterranean). There’s also the Strait of Messina, so wicked and turbulent it’s inspired Homeric tales of sea monsters.

How do you keep three kids under 11 entertained on such a trip? Yep, Homer’s a good place to start.

Midway through the journey, we pressed play on the audio book for The Illiad and The Odyssey. I’m hooked from the moment I hear about the “wine-dark sea”—mare il colore del vino—in Italian.

Ulysees’ (okay, Odysseus for many of you) slog to and from Ithaca, off to war and all the adventures in between, is the story of every Hollywood blockbuster, every adventure tale you’ve read your kids at night. After Homer, there’s little new under the sun. Driving along listening (somewhere between the tales of the Trojan Horse and the Cyclops), it dawned on me that we see these same characters, their motivations and the inevitable downfalls and successes in every tale of mayhem, chance and glory. That includes today’s markets, too. 

So, here we go…. on a small adventure. Al mare il colore del vino. The wine-dark seas beckon.


Sing to me, Muse

These markets have everything: cunning heroes, hubris, tragic twists and turns. Here are four characters from Homer’s epic poems that I see in today’s markets most days. There are scores more, no doubt.


Poor Cassandra. She has a gift. The gods bestowed upon her a power to accurately see what others cannot. If only the world would listen. Cassandra is about as tragic a figure as you’ll find in Greek mythology. Her predictions, always spot-on, repeatedly go unheeded. This proves to be particularly bad news when she warns the good people of Troy that that mammoth wooden horse they’ve just admitted into the city gates is—wait for it!—no gift from the gods, but rather an elaborate trap.

Oh, Cassandra, the people of Troy groan at her warning. You’re such a bear. No matter what argument Cassandra has for the people, it doesn’t matter. If it comes from her mouth, it’s doomed to be dismissed. Tesla bears must feel some kinship with the brilliant but tragically flawed Cassandra. Tesla has become the most shorted stock in history. It’s also become the world’s most valuable car company.

Lotus eaters

In The Odyssey, Ulysses and his men are thrown off course by “foul winds.” After nine rough days at sea, they land on an island inhabited by a carefree bunch. They’re wholly unperturbed by the stresses of the modern world. The source of their bliss is the lotus leaf. For those who munch, munch, munch away, this fruit will magically wipe away any practical concerns—like, say, the seaworthiness of a wind-battered sea vessel or—stick with me for a moment here—a portfolio overweight in cruise ship stocks and bankrupt car-rental companies.

Nobody here at Bull Sheet is suggesting investors are indulging in powerful mind-erasing narcotics as they plow into iffy stocks. But investment pros must have been wondering what was up last month with Robinhood traders when they piled into Hertz shares even though executives were repeatedly warning that the company was probably worthless. 


With its endless flow of easy credit and its lender-of-last-resort beacon-like pledge, the Federal Reserve Bank is like a benevolent god. Where would this markets rally be without it? It’s as if the central bank chiefs don’t want to see us mortals get hurt by forces beyond our control.

Worried about bankruptcies? We’ve got a plan to rescue fallen angels. Concerned about credit markets? We have an unlimited balance sheet to spend, spend, spend.

Too bad there are no such goodly forces in Greek mythology. No, the gods all scheme to knock the mortals down a peg—a reminder to never mess with the gods. 

The closest (upon my read) you can find to the Fed is Calypso, the fair nymph who detains Ulysses on her island idyll for seven years. An expert seamstress and songstress, Calypso promises Ulysses the world. 

Stay with me, she coos, and I’ll give you immortality and a stress-free life. Just look at my island idyll! What more could you want?  Of course, Ulysses doesn’t stick around. But he did get a restful seven-year vacation on her island paradise.

Pfft, you can hear the Fed hawks sniff. Seven years! That’s nothing. We’ve given the markets a rock-bottom Fed Funds rate since 2008. And just look at our balance sheet! (See chart). Investors, stay with us. We’ll give your portfolios eternal life.


Our hero. He heads off to war, and eventually makes it back again. Along the way, he outfoxes forces more powerful than him. He’s seen it all over the years, but still manages to resist the sirens’ call—the equivalent to bitcoin rallies and Chinese equity bubbles.

If there’s a secret to his success it’s that he plays it (mostly) conservatively, navigating through trouble with clear eyes. Eventually, he gets back home in one piece to live the rest of his days with his beloved Penelope.

And the sun sets over the wine-dark seas… What could go wrong tomorrow?

Note: I’m sure I’ve overlooked an obvious hero or mischievous god somewhere in this humble write-up. Please email me with your feedback on my omissions, misinterpretations—or, just to share your general Homeric musings.


Have a nice day, everyone. I’ll see you here tomorrow. … Before I go, a big thanks to Rey Mashayekhi who took the keys in my absence last week. Chapeau!

Bernhard Warner

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