After the long MLK holiday weekend equity markets are under pressure, like the pounding that Hoosiers QB Fernando Mendoza overcame in last night’s College Football championship. Congratulations to the reportedly largest alumni base in the US, of which at least one is a loyal MAC Desk reader. While Indiana celebrates an historic win, attendees at the World Economic Forum are likely in a less celebratory mood after landing in Davos, on the heels of Trump reopening the Trade War playbook. Over the weekend he proposed 10% tariffs against European countries (and eventually rising to 25%) that didn’t go along with plans to acquire Greenland. He later agreed to a meeting to discuss the issue while in Davos- participants unknown as of now- after a call with NATO chief Mark Rutte. It looks like the Hoosiers celebrated just in time too. Popping the bubbly may get more expensive after Trump also threatened 200% tariffs on French wine and champagne after French PM Marcon declined Trump’s Board of Peace initiative for Gaza. He also told Trump, “I do not understand what you are doing on Greenland.”

The other thing weighing on equity markets is the sharp move higher in global yields. Long-dated JGB yields rocketed >20bp overnight amidst growing concerns that the new government will cut taxes and ramp spending. This is bleeding into US markets as there is a Bear steepening, with the 2y about flat while 10 and 30yrs are up around ~6bpsm but off the worst levels. The Dollar is under pressure as investors move into the Swiss Franc safe-haven and the Euro gains as well against the greenback. Precious metals also continue to move sharply higher.