The cloud of impeachment hangs over the markets—even Bitcoin is sinking

January 11, 2021, 10:53 AM UTC

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Good morning. If you were expecting a bit of a reprieve in the news flow this week, forget it. House Speaker Nancy Pelosi is laying down an ultimatum to Vice President Mike Pence: if President Trump doesn’t resign immediately, the House will move to impeach him for [checks notes] the second time.

A reminder: the markets largely ignored Impeachment 1.0 way back when—in pre-COVID 2020. Even still, U.S. futures are falling this morning.

As UBS chief economist Paul Donavan reminds us, politics do matter. He gives three reasons in his investor note today:

1. A successful impeachment could bar US President Trump from office in the future. If investors think US President Trump has a political future that might matter. 2. Impeachment may deepen the partisan political divide, making legislation more difficult to pass. 3. Impeachment would take up time in the Biden presidency—and time is a scarce and valuable commodity in Washington D.C.

It’s also earnings season. Later this week we get the first wave of Q4 reports from the big banks—Citigroup, JPMorgan Chase—and airlines—Delta Air Lines.

Let’s spin the globe and check in on what’s moving the markets.

Markets update


  • The major Asia indexes are mixed in afternoon trading with Japan’s Nikkei up 2.4% and Shanghai Composite down 1.1%. Meanwhile, the KOSPI in Seoul was down more than 1% after gaining nearly 10% last week.
  • The fallout from the Trump Administration order to delist select Chinese firms continues today as a trio of U.S. banks, including Goldman Sachs, have decided to pull the plug on 500 structured products based out of Hong Kong, Bloomberg reports.
  • Investigators in Indonesia hope to retrieve the black box from the site of where the doomed Sriwijaya Air flight went down over the weekend. The fatal crash once again puts the spotlight on Boeing, down 0.2% in premarket trading, and the Indonesia commercial airline sector.


  • The European bourses are off in early trading with the Stoxx Europe 600 down 0.2% at the open.
  • The financial services sector, the engine of the London economy, was practically left out of the post-Brexit trade deal, which makes a new round of talks between the U.K. and EU.
  • It won’t be the biggest IPO of the year, but it could be the coolest. The iconic British boot brand Dr Martens plans to go public this year, according to the Financial Times. (And, with that news, The Who’s Quadrophenia goes straight to the top of my Spotify playlist.)


  • The U.S. futures are in the red this morning. That’s after all three major exchanges racked a series of record highs in Week One of 2020, with the Nasdaq leading the way, up 2.4%.
  • Shares in Twitter are down 6.2% in premarket trading. That’s after the social media giant on Friday decided to permanently boot President Trump off its platform, triggering threats of boycotts and renewed calls to rein in Big Tech.
  • It’s earnings season, everyone. We’ll find out later this week if the recovery rally has legs. The banks, a major bellwether for the economy, will report Q4 and full-year results. Bank stocks have been rallying since early November.


  • Gold is up, but it’s off a brutal stretch in which it’s dropped more than 100 bucks/ounce since Wednesday.
  • The dollar is up as a risk averse mood takes hold of the markets.
  • Crude is down, with Brent trading around $55.50/barrel.
  • Bitcoin fell to a low of $33,200 overnight, off more than 13%.


As you like it

I had originally planned to write about earnings and fund flows and ETFs in this space today, but after the events of last week in Washington and the subsequent melt-up on Wall Street, I put away my markets research and reached for a different kind of inspiration.


In search of a muse last summer, during more benign times, you may recall I took a stab at pointing out the characters in Homer’s The Odyssey who would feel right at home in today’s bull market run.

I thought, given the collective January-downer mood many of us are in, I’d try something similar today with The Bard.

So, here we go. Much ado about… well, let’s see.

Banquo, Macbeth

Banquo is not so much a character as he is a dreaded symbol of what can go wrong. There’s a moment in Act I of Macbeth when Banquo, upon meeting the soothsayer witches, speaks, of, gasp, the B-word. 

“The earth hath bubbles, as the water has,/ And these are them. Wither are they vanish’d?”

An astute markets watcher would be spooked by any mention of bubbles. And sure enough everything goes wrong between Banquo and his pal, Macbeth, after they meet the three witches. Macbeth murders Banquo, only to be later haunted by Banquo’s ghost. Bull markets are full of dead Banquos. Why did I bail on Tesla at $330, during that September swoon?, you can almost hear a modern-day Macbeth beseeching the market gods.

Nick Bottom, A Midsummer Night’s Dream

You’ve gone long on a bunch of empty-box SPACs that promise to revolutionize the EV market. It’s a can’t-miss tip courtesy of the self-confident Nick Bottom. Yes, he’s a player in an absurdist Shakespearean comedy, but this Bottom chap looks like the real deal. After all, Titania, the queen of the fairies, has just fallen hard for the guy. He must be doing something right! … Never mind that there’s a spell on both of them.

To recap: Titania, the fairy queen, has awoken to fall passionately for the first thing she sees—Bottom. It’s just that Puck has turned Bottom into an ass. “To say the truth, reason and love keep little company together nowadays,” Bottom remarks to an amorous Titania. Remember: only a Bottom would question the meaning of reason and love in a bull market. A true bull would see his ass head and think, I can work with this

Cordelia, King Lear

My favorite of all Shakespearian characters, Cordelia is honest and virtuous to a fault. A recap: Cordelia’s mopey despot of a father, King Lear, has just challenged his children to a loyalty test. (Such a thing would never happen these days in the halls of power, but bear with me.) While her siblings gush out their praise in a manner that would make Kim Jong-un blush, Cordelia gets all choked up. She can’t find the words to express her true feelings for her father, and this enrages the feeble-minded king. He banishes her from the kingdom, penniless—stripped of everything, not even a beaten down energy ETF. But Cordelia returns later in the play when the old fool is at his lowest moment. It’s her unwavering love that finally gets this flawed character to see the light. You’re not going to like this analogy; Cordelia is a value stock. She gives back in good times and bad. Don’t read anything into the fact that she’s executed by hanging in the end.

Antonio, Portia, Shylock and Bassanio, The Merchant of Venice

Antonio is one of Shakespeare’s most famous bulls. The Venetian merchant is literally betting his ships will come in. They had better. He’s on the hook with Shylock for one of the greatest margin calls of all times: a pound of his own flesh.

Alas, the ships are late, the wager falls apart, and the merchant has to pay up. Enter our hero, Portia, who artfully gets Antonio out of the mess. (If only Tesla bears had a Portia to save their shorts.) Really, it’s the least Portia could do; Antonio was instrumental in setting up Portia with his good friend, Bassanio. Portia, you’ll recall, fell for Bassanio even though the guy’s a real pauper—not even a measly 401(k) to his name. But that’s all forgiven when Portia utters the line of all lines: “Beshrew your eyes,/ They have o’erlooked me and divided me.”

What in the devil is she saying? “Beshrew” is Shakespeare-speak for “to curse.” As in: Beshrew this FX market, and your long-dollar foolishness!


There are no doubt scores more Shakespearean characters worthy of a Bull Sheet write-up. Who did I leave out? Let me know. You have my email below.

Oh, and if you can’t get enough of Shakespeare, I highly recommend James S. Shapiro’s Shakespeare in a Divided America.


Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's reads

Top stock funds. It's that time of year when the business press rates the top performers of 2020. And the bigger winner is: Morgan Stanley's Inception Portfolio, which pulled off a 150% return last year, the Wall Street Journal reports.

You could lose your shirt. That's the warning this morning from the U.K's Financial Conduct Authority on Bitcoin and other crypto assets. “If consumers invest in these types of product, they should be prepared to lose all their money," the FCA said in a statement, Bloomberg reports.

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